MSME stands for Micro, Small and Medium Enterprises. These enterprises contribute significantly to the development process and act as a vital link in industrialisation in terms of production, employment and exports for economic prosperity. They widen the entrepreneurial base and use local raw materials and indigenous skills.

The Government of India defines MSME based on investment in plant and machinery and turnover. This measure considers the socio-economic environment in India where capital is scarce and labour is abundant.

The MSMED Act, 2006 came into force in October 2006 to provide a single legal framework for micro, small and medium enterprises. This Act addresses issues relating to definition, credit, marketing and technology upgradation for these enterprises.