MSME Sector to Drive India's $4 Trillion Economy by End of 2025
Friday, 30 May 2025, 11:47 IST
• India’s MSME sector is set to become the key driver of the $4 trillion economy by end of 2025.
• CA Ashok Holani highlighted strong growth in sectors like EVs, agritech, FinTech, and healthcare.
• With a 13 percent YoY credit growth and 2.5 percent CAGR in MSMEs.
India’s Micro, Small, and Medium Enterprises (MSME) sector is poised to become the primary engine of economic growth by the end of 2025, according to CA Ashok Holani, Director of Holani Consultants Privatet Limited. Commenting on the recent International Monetary Fund (IMF) World Economic Outlook report which projects India to become the world’s fourth-largest economy.
By overtaking Japan Holani stressed the indispensable role of MSMEs in achieving this milestone. “MSMEs will play a pivotal role in India's $4 trillion economy, and cannot be overlooked”, he said.
Currently contributing around 29 percent to India’s GDP and employing nearly 60 percent of the workforce. The MSME sector is the backbone of India's economic framework. Holani highlighted key growth areas within MSMEs including electric vehicles (EV), agritech, FinTech, e-commerce, healthcare, and renewable energy, all of which are set for substantial growth in 2025.
"The big leap for MSMEs is inevitable, and so is their role in driving India’s growth story", he added.
He marked that the sector’s Gross Value Added (GVA) share in India’s GDP rose to 30 percent in 2022–23, symbolizing a strong upward trend. He credited ongoing policy initiatives such as NITI Aayog’s SME 4.0 Competence Centers for fostering technological advancement and enhancing competitiveness.
With commercial credit exposure to MSMEs rising to Rs 35.2 lakh crore, a 13 percent year-on-year increase and a projected 2.5 percent compound annual growth rate (CAGR) in the number of MSMEs. Holani foresees multiple engines powering India’s journey toward a $4 trillion economy. He emphasized that with the right policy support and innovation, the MSME sector will not only contribute significantly to GDP but also generate large-scale employment and sustainable growth.
• CA Ashok Holani highlighted strong growth in sectors like EVs, agritech, FinTech, and healthcare.
• With a 13 percent YoY credit growth and 2.5 percent CAGR in MSMEs.
India’s Micro, Small, and Medium Enterprises (MSME) sector is poised to become the primary engine of economic growth by the end of 2025, according to CA Ashok Holani, Director of Holani Consultants Privatet Limited. Commenting on the recent International Monetary Fund (IMF) World Economic Outlook report which projects India to become the world’s fourth-largest economy.
By overtaking Japan Holani stressed the indispensable role of MSMEs in achieving this milestone. “MSMEs will play a pivotal role in India's $4 trillion economy, and cannot be overlooked”, he said.
Currently contributing around 29 percent to India’s GDP and employing nearly 60 percent of the workforce. The MSME sector is the backbone of India's economic framework. Holani highlighted key growth areas within MSMEs including electric vehicles (EV), agritech, FinTech, e-commerce, healthcare, and renewable energy, all of which are set for substantial growth in 2025.
"The big leap for MSMEs is inevitable, and so is their role in driving India’s growth story", he added.
He marked that the sector’s Gross Value Added (GVA) share in India’s GDP rose to 30 percent in 2022–23, symbolizing a strong upward trend. He credited ongoing policy initiatives such as NITI Aayog’s SME 4.0 Competence Centers for fostering technological advancement and enhancing competitiveness.
With commercial credit exposure to MSMEs rising to Rs 35.2 lakh crore, a 13 percent year-on-year increase and a projected 2.5 percent compound annual growth rate (CAGR) in the number of MSMEs. Holani foresees multiple engines powering India’s journey toward a $4 trillion economy. He emphasized that with the right policy support and innovation, the MSME sector will not only contribute significantly to GDP but also generate large-scale employment and sustainable growth.
