NITI Aayog Charts Policy Path to Empower Medium Enterprises in India

In a landmark move to revitalize India’s industrial base, NITI Aayog has released a detailed report titled “Designing a Policy for Medium Enterprises”, which offers a robust roadmap for transforming India’s medium enterprises into pivotal engines of economic growth. Launched by Shri Suman Bery, Vice Chairman of NITI Aayog, in the presence of Dr. V.K. Saraswat and Dr. Arvind Virmani, Members of NITI Aayog, the report addresses longstanding policy gaps and provides targeted interventions to elevate medium enterprises from being overlooked actors to central contributors in the nation’s economic journey towards Viksit Bharat @2047.

Medium Enterprises: The Missing Middle in MSMEs

India’s Micro, Small, and Medium Enterprises (MSMEs) contribute significantly to the economy, accounting for around 29% of GDP, 40% of exports, and employing over 60% of the workforce. Yet, the MSME sector is disproportionately composed:

• 97% are micro enterprises

• 2.7% are small enterprises

• Only 0.3% are medium enterprises

Despite their small share, this 0.3% segment contributes 40% of MSME exports, reflecting its massive potential if provided the right policy and structural support. Medium enterprises are often agile, innovation-driven, and capable of achieving scale, but are held back by structural inefficiencies and gaps in the ecosystem.

Key Challenges Identified

The report highlights a number of persistent challenges confronting medium enterprises:

• Inadequate access to custom financial solutions tailored to their operational scale

• Limited adoption of modern technologies, especially Industry 4.0 tools

• Inadequate R&D support and absence of dedicated innovation hubs

• Lack of regional and sectoral testing infrastructure for quality assurance

• Mismatch between workforce skills and enterprise needs

• Fragmented access to schemes and regulatory information

These bottlenecks have restricted medium enterprises from becoming catalysts of high-value production, export growth, and employment generation.

Strategic Interventions Across Six Priority Areas

To unleash the latent potential of these enterprises, the report proposes a six-pronged policy framework:

1. Tailored Financial Solutions

The report calls for the introduction of financial products suited to the operational model of medium enterprises, including:

• A working capital financing scheme linked to turnover

• A ₹5 crore credit card facility with market-aligned interest rates

• Faster disbursal of funds through mainstream banking channels, under the oversight of the Ministry of MSME

These mechanisms aim to resolve liquidity issues and ease access to growth capital.

2. Technology Integration and Industry 4.0 Adoption

To bolster technological competitiveness:

• Existing Technology Centers will be upgraded into India SME 4.0 Competence Centers, each customized to specific sectors and regions.

• These centers will promote the deployment of AI, IoT, robotics, and other Industry 4.0 technologies.

3. Promotion of Research & Development

A dedicated R&D cell within the Ministry of MSME will be established, which will:

• Harness the Self-Reliant India Fund

• Fund cluster-based innovation projects with national impact

• Foster collaboration between enterprises, academia, and R&D institutions

4. Cluster-Based Testing and Certification Infrastructure

To meet quality and regulatory standards:

• New sector-specific testing facilities will be developed

• Focus will be placed on easing compliance burdens while enhancing product credibility and export readiness

5. Custom Skill Development

The report proposes:

• Region- and sector-specific skilling programs

• Integration of medium enterprise-specific modules in the Entrepreneurship and Skill Development Programmes (ESDP)

• Stronger alignment of educational and vocational training with enterprise needs

6. Creation of a Centralized Digital Portal

To address the problem of fragmented information:

• A new dedicated sub-portal within the Udyam platform will be created

• It will feature:

  • Scheme discovery tools

  • Regulatory compliance guidance

  • AI-powered assistants for handholding enterprises through processes

This portal is expected to become a one-stop resource hub for policy, finance, training, and technology access.

The Broader Vision: Viksit Bharat @2047

At its core, the report positions medium enterprises as crucial to India’s transition from a developing economy to a global economic powerhouse. Their ability to scale, innovate, and create quality employment positions them uniquely for:

• Supporting high-end manufacturing

• Boosting exports

• Driving rural and semi-urban industrialization

NITI Aayog underscores that inclusive and consultative policy design is key to unlocking this potential. Collaboration among ministries, financial institutions, skilling agencies, and private industry is essential for delivering tangible outcomes.

A Call to Action

The report also serves as a call to action for state governments, industry associations, and private sector stakeholders to come together and:

• Foster an enabling environment for mid-sized businesses

• Extend credit, mentorship, and technical assistance

• Support scalable pilot programs and innovation-driven clusters

The document reaffirms India’s commitment to reshaping its industrial policy landscape with sharper focus, smarter governance, and sustained investment in innovation.

The full report can be accessed at: Designing a Policy for Medium Enterprises (PDF)