Under notification S.O. No. 1364 E dated 21.03.2025, the Ministry of Micro, Small & Medium Enterprises (MSME) has issued a notification informing about the revised definition. This update is critical for government sellers on the Government e-Marketplace (GeM) as it affects eligibility, benefits, and compliance requirements.
In this blog, we will break down the key changes and their impact on sellers registered on GeM.
Key Changes in the MSME Definition#
The revised definition introduces updated criteria for classifying enterprises based on investment in plant & machinery/equipment and annual turnover.
The new thresholds are as follows:
- Micro Enterprises:
- Investment in Plant & Machinery or Equipment: Up to ₹1 crore
- Annual Turnover: Up to ₹5 crore
- Small Enterprises:
- Investment in Plant & Machinery or Equipment: Up to ₹10 crore
- Annual Turnover: Up to ₹50 crore
- Medium Enterprises:
- Investment in Plant & Machinery or Equipment: Up to ₹50 crore
- Annual Turnover: Up to ₹250 crore
This update provides a more inclusive framework, ensuring that businesses can scale while continuing to benefit from MSME schemes.
Impact on GeM Sellers#
For government sellers on GeM, this change impacts multiple aspects:
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Eligibility for MSME Benefits: MSMEs registered under Udyam Registration will continue to enjoy benefits such as priority procurement, relaxed Earnest Money Deposit (EMD) norms, purchase preferences, and exclusive bidding for selected tenders.
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Registration and Compliance: Existing sellers must ensure their Udyam Registration reflects the updated definition. If a seller's enterprise has come within the new limits, they may re-register themselves as MSME.
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Tender Participation:
- MSME reservation in government procurement will follow the same terms and conditions.
- Certain tenders may now be accessible to a broader range of enterprises due to increased turnover limits.
- Financial Assistance and Credit Access:
- Credit-linked subsidies and collateral-free loans under MSME schemes will continue to apply as per the new classification.
- Banks and financial institutions may revise their lending norms to align with the updated MSME structure.
Action advised for MSMEs#
To stay compliant and benefit from the revised definition, we advise to follow the below given steps:
- Verify Your MSME Classification: Check whether your enterprise falls under Micro, Small, or Medium as per the new limits.
- Update Udyam Registration: If required, update your Udyam details to ensure smooth access to government tenders and MSME benefits.
- Review Tender Opportunities: Look for tenders where the eligibility criteria might have changed due to the revised definition.
- Monitor Further Notifications: Stay updated with further amendments or clarifications from the Ministry of MSME.
Conclusion#
The revised MSME definition is a significant step towards supporting the growth of small businesses and expanding the coverage under MSME criteria. It is advisable for sellers to proactively align with these changes to maximize benefits and ensure seamless participation in government procurement.
Follow us to stay updated, receive guidance on being compliant, and leverage these new opportunities to grow your business on GeM!
