Your business crossed ₹10 crore in investment a couple of years ago. You lost your MSME certificate. You lost priority lending rates, collateral-free credit access, and CGTMSE guarantee cover — quietly, with no announcement, just a reclassification on paper.
From April 1, 2025, that ₹10 crore limit is now ₹25 crore. You may qualify again — and the benefits are worth checking today.
What Changed on April 1, 2025
The Finance Minister announced in Budget 2025 that investment limits would increase by 2.5 times and turnover limits by 2 times across all three MSME tiers. The revised classification took effect from April 1, 2025.
| Category | Investment (Old) | Investment (New) | Turnover (Old) | Turnover (New) |
|---|---|---|---|---|
| Micro | ₹1 crore | ₹2.5 crore | ₹5 crore | ₹10 crore |
| Small | ₹10 crore | ₹25 crore | ₹50 crore | ₹100 crore |
| Medium | ₹50 crore | ₹125 crore | ₹250 crore | ₹500 crore |
Investment means investment in plant and machinery or equipment — not land, buildings, or financial assets. Turnover is your annual net turnover as per your GST returns and audited financials.
Both conditions — investment AND turnover — must be satisfied for classification. If you meet the investment limit but your turnover exceeds the cap, you move to the higher tier.
Who This Directly Helps
Three types of businesses benefit most from this revision.
Businesses that were reclassified upward before April 2025. If your investment crossed ₹1 crore and you lost Micro status, or crossed ₹10 crore and lost Small status, check your current numbers against the new thresholds. A business with ₹8 crore in plant investment and ₹40 crore in turnover was classified as Small under the old limits. Under the new ones, it's Micro.
Businesses that slowed down investment to avoid reclassification. This is more common than it sounds. A manufacturer approaching ₹10 crore in machinery investment would sometimes delay equipment purchases to stay in the Small category and retain collateral-free loan eligibility. The doubled limits remove that constraint entirely. Invest in growth without the reclassification penalty.
Businesses that never registered for Udyam because they assumed they were too large for MSME. A company with ₹20 crore in investment and ₹80 crore in turnover had no path to MSME status before April 2025. Now it qualifies as Small. That unlocks CGTMSE credit guarantee cover, TReDS platform access, and government procurement quotas.
Prakash runs a precision parts manufacturing unit in Pune. His machinery investment crossed ₹12 crore in 2023 and his MSME certificate lapsed. Under the new Small Enterprise limit of ₹25 crore, he requalifies — and his bank has already offered him a fresh collateral-free loan under CGTMSE cover that he was ineligible for during those two years.
What MSME Status Actually Gets You
The certificate isn't a trophy. It's an access card to a specific set of financial and regulatory benefits — many of which have been significantly enhanced in Budget 2026-27.
Credit access:
- CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises) cover now up to ₹10 crore per borrower — doubled in Budget 2026-27 from ₹5 crore
- Collateral-free loans from banks up to the guaranteed limit
- Priority sector lending allocation — banks are mandated to lend a percentage of credit to MSMEs; your application goes into a faster queue
- Guarantee fee reduced to 1% for loans in 27 priority sectors
Payment protection:
- Buyers are legally required to pay MSME suppliers within 45 days under the MSMED Act
- Delayed payments attract compound interest at 3× the RBI bank rate
- TReDS platform access — get your invoices financed within 48 hours by banks and NBFCs without collateral
Government procurement:
- GeM (Government e-Marketplace) gives MSMEs preferential treatment in government tenders
- 25% of all government procurement is mandated to come from MSMEs; 4% reserved for Micro enterprises specifically
Other benefits:
- Priority access to SIDBI schemes and government credit-linked capital subsidy programmes
- Reduced fees for trademark and patent applications
- Protection under MSME Samadhan (delayed payment portal)
The Investment vs Turnover Trap to Watch For
Both limits must be satisfied simultaneously. The higher threshold catches businesses out in a specific scenario: strong turnover growth that outpaces investment.
Take a D2C brand doing ₹90 crore in annual GMV with ₹5 crore in equipment. Investment-wise, it's a Micro Enterprise. Turnover-wise, it falls between Small (below ₹100 crore) and Medium (below ₹500 crore). The higher turnover determines the final classification — so this business would be classified as Small, not Micro, despite having Micro-level investment.
The rule: both conditions set a ceiling. You're classified at the higher of the two implied tiers.
How to Check and Update Your Classification
Step 1 — Calculate your investment figure. Total the Written Down Value (WDV) of all plant and machinery from your last balance sheet. Exclude land, buildings, furniture, and vehicles used for personal purposes.
Step 2 — Note your last FY turnover. Use your GSTR-1 reported turnover or audited financials — whichever is higher. Exports are excluded from the turnover calculation for MSME classification purposes.
Step 3 — Map against the new thresholds. Use the table above. If both investment and turnover fall within the same tier, that's your classification. If they imply different tiers, take the higher one.
Step 4 — Update your Udyam certificate. Your Udyam Registration Certificate needs to reflect your current classification. If you reclassified downward (from Small back to Micro, for instance), the new, more favourable status applies from the date your figures fall within the lower threshold — not retrospectively from April 1, 2025.
If your certificate is outdated or you've never registered, start at the Udyam registration page — registration is free and done entirely online using your Aadhaar and PAN.
Check your loan eligibility under the new CGTMSE limits → See how TReDS gives MSMEs 48-hour payment on invoices → Full MSME benefits from Budget 2026-27 →
The window to reclaim MSME status for businesses that crossed the old limits is open right now — it doesn't require paperwork beyond updating your Udyam certificate. A status that took years to lose takes under an hour to reclaim.