MSME Classification and Udyam Registration: Limits, Benefits and Process
The MSME limits were raised from 1 April 2025. Here is how your business is classified and why Udyam registration matters.
If you run a small business in India, Udyam registration is one of the most useful registrations you can have. It gives your business formal MSME status, which opens doors to bank finance, government schemes and payment protection.
MSME classification limits
The Ministry of MSME revised the limits through notification S.O. 1364(E) dated 21 March 2025, effective from 1 April 2025. Classification depends on both investment in plant and machinery or equipment, and annual turnover.
| Category | Investment up to | Turnover up to |
|---|---|---|
| Micro | ₹2.5 crore | ₹10 crore |
| Small | ₹25 crore | ₹100 crore |
| Medium | ₹125 crore | ₹500 crore |
An enterprise moves to a higher category if it crosses the limit on either measure. It moves to a lower category only when it falls below both limits. Export turnover is excluded when calculating turnover for classification.
Benefits of Udyam registration
- Easier access to priority-sector bank loans and credit guarantee schemes for collateral-free loans.
- Protection on delayed payments from buyers. Our article on Section 43B(h) explains how late payment to micro and small suppliers can affect the buyer’s tax deduction.
- Eligibility for government subsidies, tenders and schemes meant for MSMEs.
- Concessions on certain fees and lower interest on some loans.
Who can register
Proprietorships, partnership firms, LLPs, companies and other entities engaged in manufacturing or services, including traders for certain purposes, can register on the Udyam portal.
How to register
- Visit the official Udyam registration portal.
- Enter the Aadhaar number of the proprietor, partner or authorised signatory and verify with OTP.
- Provide PAN and, where applicable, GSTIN. These are verified through government databases.
- Fill in business details: name, address, type of activity, NIC code, number of employees, investment and turnover.
- Submit and receive the Udyam Registration Number and certificate.
There is no government fee for Udyam registration. Keep the certificate and update your details as the business grows.
Frequently asked questions
Is there a fee for Udyam registration?
No. Registration on the official portal is free.
What is the turnover limit for a micro enterprise?
Up to ₹10 crore, with investment up to ₹2.5 crore, under the limits effective from 1 April 2025.
Do I need GST to get Udyam registration?
GSTIN is linked and verified where the business is required to have one. Businesses exempt from GST registration can still apply using PAN.
Can I register more than one Udyam for the same business?
A single enterprise is registered once, and multiple activities can be added to the same registration.
This article is for general information only and is not professional advice. Rules, rates and due dates change, so confirm the latest position with the official notification or portal before acting.
Related reading
- GST Registration for Small Businesses: Turnover Limits, Documents and Process
- Private Limited Company Registration in India: Process, Documents and Costs
- Project Report and DSCR for Bank Loans: What Banks Look For
