India’s MSME Export Boom: Sectors, Countries & Policy Trends to Watch

India's journey towards becoming a global manufacturing and export powerhouse is gathering momentum—and at the core of this transformation is the country's robust and resilient MSME (Micro, Small and Medium Enterprises) sector. With over 63 million MSMEs contributing nearly 30% to India’s GDP and over 40% to total exports, the sector is witnessing an export-led growth renaissance.

In FY 2024–25, India’s cumulative exports (goods + services) crossed USD 820 billion, according to the Ministry of Commerce. This is not just a numerical milestone but a strategic signal—India’s trade engine is shifting gears, with MSMEs playing a pivotal role in sectors ranging from engineering goods to textiles, electronics to marine products.

This exclusive SMEStreet analysis outlines the leading sectors, key destination countries, evolving Free Trade Agreements (FTAs), and policy trends MSME stakeholders and policymakers must track closely.

India’s Export Surge: Key Numbers & MSME Role

According to DGFT and EXIM Bank data, the following key figures define the 2024–25 landscape:

• Merchandise Exports (April 2025): Up 9% YoY

• Services Exports (April 2025): Up 17% YoY

• Electronics Exports: +39% growth YoY

• Engineering Goods: +11% YoY

• MSME Contribution to Total Exports: ~40%

Sanjay Budhia, Chairman of CII National Committee on Exports, noted in a recent EXIM conclave:

“India’s next wave of trade leadership will be MSME-driven, especially if policy support and FTAs are aligned to real-world business challenges.”

Leading MSME Export Sectors in FY25

Engineering Goods

Indian MSMEs are dominating the export of auto components, fasteners, valves, and tools. This sector grew 11% YoY in April 2025 and has gained traction in markets like the EU, Middle East, and Southeast Asia.

Textiles & Apparel

MSMEs in Tamil Nadu, Gujarat, and Uttar Pradesh are reviving traditional crafts with modern fashion sensibilities. The sector reported a 14% YoY growth, aided by RoSCTL and cluster-level support.

Gems, Jewellery & Handicrafts

With the establishment of Common Facility Centres (CFCs) in Jaipur, Mumbai, and Surat, MSMEs are leveraging advanced finishing, polishing, and certification services to reach North American and Gulf markets. April 2025 alone saw 11% YoY growth.

Electronics & Components

India’s push towards semiconductor packaging and consumer electronics assembly has boosted MSME growth in hubs like Noida, Bengaluru, and Pune. A whopping 39% YoY jump in electronics exports reflects this strategic shift.

Agro & Marine Products

Sectors like rice, seafood, and spices saw a 17% surge in April exports, with small exporters capitalising on FTA-backed tariff relaxations in UAE, ASEAN, and Australia.

Destination Countries & FTAs: Mapping the Export Landscape

India is actively negotiating or implementing FTAs with:

As noted by the Commerce Ministry:

“India’s FTA design now prioritizes MSME competitiveness, ensuring stakeholder feedback is embedded into trade negotiations.”

These FTAs not only reduce tariffs but also improve NTB (Non-Tariff Barrier) compliance and set standards for quality and origin that Indian MSMEs are learning to adapt to.

Export Promotion Schemes Empowering MSMEs

1. RoDTEP (Remission of Duties and Taxes on Exported Products)

• Applicable on 10,642 tariff lines

• ₹16,575 crore allocation for FY25

• Seamless IT-enabled claim via ICEGATE

2. SEIS (Service Exports from India Scheme)

• 5% duty credit scrip for services such as IT, consulting, logistics

• Special boost to MSMEs in digital services

3. Advance Authorization & EPCG

• Facilitates duty-free imports of inputs

• Higher usage by MSME exporters in engineering and pharma

4. Interest Equalization Scheme

• 3%–5% interest subvention on pre- and post-shipment credit

• Crucial for MSMEs with thin margins

According to DGFT, over 65% of RoDTEP and SEIS users in FY25 were MSMEs from Tier II and III cities.

Infrastructure & Digital Enablers

• DGFT’s Unified Trade Portal now integrates Aadhaar, GSTIN, RoDTEP, SEIS, and IEC services.

• EXIM Bank’s MSME Trade Conclaves in Tier II cities are boosting capacity-building.

• Uttar Pradesh Government’s UPNVA Campaign is training over 500 MSMEs on packaging, compliance, and global certifications.

• States like Tamil Nadu, Maharashtra, and Gujarat have also launched MSME export facilitation cells.

SMEStreet Insight: What's Needed Next?

Based on our ongoing engagement with exporters and policy leaders, SMEStreet recommends:

Conclusion: MSMEs as the Future of India's Export Diplomacy

India’s ambition to hit USD 1 trillion in exports by 2030 is no longer a distant dream—thanks to the agility and innovation of its MSME sector. From engineering firms in Ludhiana to textile makers in Tiruppur, Indian MSMEs are increasingly export-ready, thanks to a wave of supportive policies and global demand recovery.

As the trade environment evolves, policymakers must continue to place MSMEs at the heart of India’s export agenda, ensuring every policy is inclusive, digital-first, and future-ready.