The Confederation of Indian Industry (CII) has warmly welcomed the Cabinet’s decision to establish a Rs 10,000 crore SME Growth Fund, describing it as a timely and transformative intervention to address the “missing middle” in India’s industrial ecosystem. The decision builds upon the holistic set of announcements made earlier in Union Budget 2026-27 focussing on providing equity, liquidity and professional support for the SME ecosystem.
While MSMEs contribute over a third of India's manufacturing output, nearly half of the country's exports and almost one-third of GDP, access to growth capital remains a persistent challenge. Small and medium enterprises, which account for over 70% of MSME exports and are critical for strengthening India's participation in global value chains, often struggle to secure long-term equity funding needed for expansion and technology adoption. Existing funding mechanisms have predominantly served early-stage and micro enterprises, creating a structural gap in growth capital for scaling SMEs.
The establishment of the SME Growth Fund is therefore a welcome and much-needed measure that can unlock the next generation of Indian enterprises with the potential to compete globally. "India's manufacturing ambitions depend upon the success of SMEs that have the potential to grow into globally competitive enterprises. The SME Growth Fund is a welcome intervention that can help these firms get access to long term capital and unlock a new wave of investment, innovation and employment generation," said Mr R Mukundan, President, CII.
By providing long-term capital, the fund will enable Indian SMEs to scale operations, invest in technology and manufacturing capacity, expand into international markets and undertake strategic investments. Strengthening domestic manufacturing capabilities will not only improve competitiveness but also enhance India's economic resilience and integration into global value chains, added the CII President.
CII appreciates the scheme’s proposed outreach to enterprises operating in industrial clusters and Tier-II and Tier-III cities. It is a positive step towards promoting balanced regional development and broadening the manufacturing base across the country. The announcement complements the Government’s broader efforts to strengthen the SME ecosystem through ease-of-doing-business reforms, digitalisation initiatives, public procurement support, startup promotion programmes, credit support mechanisms and production-linked incentive schemes.
The Fund will play a catalytic role in nurturing a new generation of Indian enterprises across manufacturing, technology, innovation-driven sectors and strategic value chains. Exuding confidence, Mr. Mukundan said, “The SME Growth Fund, coupled with government’s continued efforts to improve access to finance, technology and markets, has the potential to create India's own Mittelstand of globally competitive manufacturing enterprises”. CII also welcomes the continued support being extended to the Self-Reliant India Fund and measures aimed at expanding the reach of the Trade Receivables Discounting System (TReDS), which can help address working capital constraints faced by small businesses.
Mr Mukundan welcomed the Government’s decision to take forward industry's recommendation and said that CII would work closely with the Government to support the effective implementation of the Fund.
New Delhi
8 October 2026