Nano enterprises are considered a subset of the country’s 63 million micro enterprises. These enterprises employ a substantial portion of the workforce, contributing nearly 30% to the GDP, say industry observers. This makes it imperative to recognise the important role they can play in the MSME ecosystem.
Krishnan Ranganathan, Director of Udhyam Vyapaar and Co-founder at Udhyam Learning Foundation, an entrepreneurship-focused foundation, says that this cohort has been a driver of innovation at the grassroots level. “Their resourcefulness and deep understanding of local needs enable them to devise market-specific solutions that larger enterprises might overlook,” he says.
There is no formal definition for nano enterprises. For context, micro enterprises are those where investment in plant and machinery or equipment is not more than Rs 1 crore and annual turnover does not exceed Rs 5 crore.
Experts say that within nano enterprises, about one-third have turnovers as low as Rs 50 lakh or below. “This significant disparity highlights the need for formal recognition of nano entrepreneurs as a distinct category, ensuring they receive the targeted support necessary for growth and sustainability,” Ranganathan states.
Udhyam Learning Foundation has initiated interventions through Udhyam Vyapaar, which focuses on solving the problems of nano businesses in India. The platform claims to have impacted more than 6,000 nano entrepreneurs, providing income uplift of more than Rs 25 crore and enabling additional productive hours.
Their Istri Project, for instance, benefits people who iron clothes for a living in Bengaluru, Chennai and Jaipur. This intervention focuses on transitioning these workers from traditional coal-based iron boxes to more efficient LPG iron boxes, aiming to enhance their economic prospects. It has helped reduce annual coal usage by 3,000 tonnes. The programme has also been launched in Jaipur. Another initiative, New Solutions, helps to onboard street food vendors on aggregator platforms like Swiggy and Zomato, and also mentors them.
Drawing a parallel with the situation abroad, Ranganathan says that while India has 63 million MSMEs, China has only a quarter of this number but generates 10 times the economic value. “This comparison is based on efficiency, technology adoption, market access, and support infrastructure in China, which significantly boost productivity and value creation. Addressing these factors can help India unlock MSMEs’ potential,” he says.
The situation is even more tough for the very small enterprises, since they continue to lack access to basic resources such as credit and financial solutions, as well as basic training and support systems. “Addressing these issues through tailored initiatives aimed at formalisation of the sector and improving resource accessibility is crucial for the upliftment of nano entrepreneurs in India,” he states.
Ranganathan further says that while policy initiatives are essential to strengthen this cohort, India already has a broad spectrum of policies designed to support rural and small-scale entrepreneurs. Easing GST regulations for very small businesses, he says, will reduce their tax burden and compliance requirements, allowing them to focus on growth.
“While these initiatives are on their path toward bringing in better reforms for small-scale businesses, there is an urgent need for policy interventions to be expedited. The government should streamline GST exemption registration, educate small business owners, and establish a feedback mechanism for continuous improvement. This initiative reduces operational costs and provides significant relief to small entrepreneurs,” he says.
Moreover, awareness also needs to be built in for this segment to scale heights as they may not be fully aware of the support systems in place. “While our policy frameworks are in the right place, it is crucial for us as a collective to come together and raise dialogues in the direction that truly supports this cohort and brings them together to work towards an overall upliftment of nano entrepreneurship in India,” Ranganathan adds.
