MSME registration is crucial for businesses to leverage the benefits offered under the MSMED Act by the federal or state governments and the banking sector. An MSME, classified into micro, small, or medium categories, represents a vibrant and significant segment of the Indian economy, having shown considerable growth over the past five decades.

On May 13, 2020, the Government of India announced significant relief measures for MSMEs. Additionally, there has been a major revision in the definition of what constitutes an MSME. Under the new definition, manufacturing and service sectors are no longer differentiated. Instead, there is an increase in the investment cap and a new criterion based on turnover has been introduced. This redefinition aims to broaden the scope and increase the support available to businesses within this sector.