• India’s MSMEs are at the center of India’s self-reliance and industrial expansion, with ₹12.5 lakh crore in production and 9.5 lakh jobs created 

• 27 priority sectors (from automobiles and electronics to textiles and food processing) identified, opening new value chains for MSMEs.

• ₹1.97 lakh crore in PLI incentives are encouraging domestic manufacturing and faster integration of MSMEs into global supply chains.

• Stronger access to finance through NBFC-backed solutions enables MSMEs to modernize and scale.

With ₹1.46 lakh crore in investments, the Make in India initiative has already generated an estimated ₹12.50 lakh crore in production, ₹4 lakh crore in exports, and created 9.5 lakh jobs by December 2024¹. Since its launch in 2014, India has attracted cumulative Foreign Direct Investment (FDI) worth $67.41 billion, which represents nearly 67% of total FDI inflows received over the last 24 years². These figures reflect how India’s economic transformation is well underway. Now, the next phase, Make in India 2.0, is designed to strengthen self-reliance, deepen industrial capacity, and unlock new opportunities for MSMEs.

The Evolving Vision of Self-Reliance 

Make in India redefined India’s approach to industrial development and positioned the country as a global investment destination by simplifying regulations, enhancing ease of doing business, and building modern infrastructure. After nearly a decade of progress, Make in India 2.0 marks a renewed focus on advanced manufacturing, innovation, and sustainable industrial growth. At its core, the initiative is about enabling self-reliance through local production, improved logistics, and technology-driven MSME growth. 

In the upgraded program, MSMEs play a central role in production, supply chain management, and exports, contributing 35.4% of manufacturing output, 45.73% of exports, and employing approximately 28 crore individuals³. They supply components, machinery, logistics, and services across nearly every major sector—from automobile components to textiles and beyond. For this, the government has identified 27 priority sectors that form the blueprint for a globally competitive manufacturing ecosystem. These sectors have been grouped into three broad pillars: 

1. Manufacturing & Infrastructure — automobiles, aerospace, construction, railways, ports, roads, thermal power, and space. These sectors will drive large-scale employment and industrial diversification, particularly through state-level clusters. 

2. Technology & Innovation — IT-BPM, biotechnology, electronic systems, renewable energy, and chemicals. These high-tech sectors are expected to create new value chains where MSMEs can supply components and services. 

3. Consumer & Lifestyle Industries — textiles, food processing, gems and jewellery, wellness, and tourism. These remain labor-intensive and export-oriented, generating steady demand for MSME participation. 

Through this structure, Make in India 2.0 aims for balanced growth, spanning high-tech industries and traditional sectors, while promoting sustainability, competitiveness, and regional inclusivity.  

Key Enablers of Make in India 2.0: Policy, Infrastructure, and Investment Support 

The success of Make in India 2.0 also depends on how effectively MSMEs are empowered to scale, modernize, and compete globally. This is being achieved through a combination of policy reforms, infrastructure projects, and financial interventions.

1. Policy Reforms and Ease of Doing Business 

India’s business environment has improved significantly through digitalization and regulatory simplification. Key enablers include: 

• National Single Window System (NSWS): A centralized digital portal allowing businesses to apply for multiple approvals across ministries and states.

• Production Linked Incentive (PLI) Schemes: Covering 14 major sectors with incentives worth up to ₹1.97 lakh crore, encouraging domestic manufacturing and investment in sunrise industries.

• Industrial Corridor Projects: The Delhi–Mumbai Industrial Corridor (DMIC), Chennai–Bengaluru Industrial Corridor (CBIC), and others are building state-of-the-art clusters, giving MSMEs access to world-class logistics and supply chain networks.

2. Infrastructure Support 

Initiatives such as PM GatiShakti and the National Logistics Policy have reduced bottlenecks and improved last-mile connectivity. Industrial parks, plug-and-play facilities, and specialized clusters are also being developed across states, ensuring MSMEs can access utilities, logistics, and labor more efficiently. This model helps small enterprises focus on production rather than administrative overheads. 

3. Financing and Investment Support 
    
   To help MSMEs scale up, financing remains critical. Several schemes are in place to improve liquidity and reduce collateral burdens: 

• Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE): Provides collateral-free loans up to ₹5 crore.

• RBI and SIDBI refinance schemes: Designed to support small manufacturing units and promote sustainable finance.

• NBFCs and Fintechs: RBI-regulated NBFCs like Protium are helping bridge last-mile financing, especially in Tier-2 and Tier-3 cities, through tailored products such as Machinery Loans and Loans Against Property, enabling MSMEs to modernize facilities, purchase new equipment, or expand capacity without operational disruptions.

What MSMEs Need to Do to Boost Their Production Capacity 

As industries expand under Make in India 2.0, MSMEs must also develop their capacity and integrate more deeply with both domestic and global supply chains. Their agility and localized networks allow them to adapt faster to shifts in demand, making them vital partners in achieving the government’s vision of Atmanirbhar Bharat—a self-reliant India built on indigenous production and innovation.

Here’s how small enterprises can strengthen their own production foundations to remain competitive and ready for scale:

1. Invest in Modern Machinery and Process Automation 
Modern machinery enhances efficiency, reduces costs, and ensures higher precision. Government initiatives such as the Credit Linked Capital Subsidy Scheme (CLCSS) offer up to 15% subsidy for machinery upgradation. For example, textile MSMEs upgrading to energy-efficient looms can cut power consumption, which usually accounts for 15–20% of total production costs⁴, while improving product quality. By leveraging financing options such as Protium’s Machinery Loan, MSMEs can modernize production lines and stay aligned with market demand. 

2. Focus on Quality Certification and Standardization 
Quality assurance has become non-negotiable for both exports and partnerships with Original Equipment Manufacturers (OEMs). Government-backed programs such as the MSME Sustainable (ZED) Certification Scheme provide up to 80% subsidy for micro units adopting quality standards like ISO or BIS. Standardization not only improves brand credibility but also opens the door to long-term export opportunities. 

3. Strengthen Supply Chain and Raw Material Sourcing 
Collaborating within clusters allows MSMEs to pool procurement, share logistics, and reduce costs. For instance, textile units in Gujarat or auto ancillary clusters in Pune benefit from collective sourcing of raw materials, which enhances bargaining power and reduces lead times. State-level industrial clusters and Districts as Export Hubs (DEH) programs encourage MSMEs to collaborate across the value chain, helping them meet both domestic and international orders efficiently. 

4. Expand Through Technology and Digital Tools 
Digital transformation is no longer optional. MSMEs can use online tools for production tracking, inventory control, and customer management. Platforms such as MSME Champions Portal and Udyam Assist Platform have made digital onboarding and government support easier than ever. Adopting affordable automation and management tools ensures MSMEs remain lean, responsive, and better prepared for fluctuating demand cycles. 

5. Explore Export Opportunities 
In the Union Budget 2025–26, the government set an ambitious target of ₹75 lakh crore in goods and services exports by 2030. MSMEs will play a crucial role in achieving this milestone. Through schemes like the Trade Infrastructure for Export Scheme (TIES) and Market Access Initiative (MAI), enterprises are being guided to explore new export markets and diversify their product portfolios. 

While these internal improvements are vital, MSMEs also need an enabling external environment—one that supports infrastructure, logistics, and policy reforms. That is where India’s states are stepping in. Through sector-specific industrial policies, dedicated MSME parks, and streamlined single-window systems, states are becoming the real drivers of Make in India 2.0 at the ground level. 

How States Are Empowering MSMEs to Scale Production 

Across India, several states are actively building ecosystems to help MSMEs scale production and align with Make in India 2.0. 

• Tamil Nadu is developing industrial corridors and MSME parks focused on auto and electronics manufacturing. Its Single Window Facilitation Portal has reduced approval timelines drastically, helping MSMEs integrate into global supply chains.

• Gujarat continues to expand its textile, chemical, and renewable energy clusters, supporting MSME capacity building through dedicated funds and technology centres.

• Maharashtra is promoting engineering and auto ancillary MSMEs through district-level export hubs and cluster-based infrastructure.

• Uttar Pradesh has introduced the One District One Product (ODOP) program, encouraging specialized production and market linkages.

• Karnataka and Telangana are driving digital MSME growth, offering incentives for robotics, AI, and advanced manufacturing tools.

These state initiatives complement central programs, enabling MSMEs to grow beyond local markets. Financing partners like Protium are further supporting this transition through accessible funding tailored to modern manufacturing needs—ensuring enterprises can invest confidently in new technology, capacity expansion, or factory modernization. 

The Road Ahead: Building a Self-Reliant, Globally Competitive MSME Ecosystem 

As India sets its sights on becoming a $5 trillion economy, MSMEs must evolve from traditional producers into innovation-driven enterprises that can meet both domestic and global demand. 

The journey ahead lies in stronger collaboration—between industry bodies, government departments, financial institutions like Protium, and small businesses themselves. Together, these partnerships can create a resilient ecosystem where local manufacturing thrives, employment rises, and India truly becomes the global hub for innovation and production.