MSME raw material support set to triple by FY30
India plans to triple state-assisted raw material procurement for MSMEs to 900,000 tonnes yearly by FY30, addressing price volatility and supply disruptions.
The Union MSME ministry is planning to significantly expand the volume of raw materials it helps small businesses procure through the state-run National Small Industries Corp. (NSIC). The target is to triple the current annual volume of about 300,000 tonnes to roughly 900,000 tonnes by fiscal year 2030, according to two government officials who requested anonymity.
NSIC operates the Raw Material Assistance and Raw Material Distribution schemes, which aggregate demand from micro, small, and medium enterprises and procure inputs at discounted rates. The schemes cover a range of commodities, including metals, coal, and construction materials. Industry estimates suggest that bulk procurement can reduce commodity prices by 3-5% and help businesses save on supply-chain costs.
In 2025, NSIC distributed 364,374 tonnes of raw materials worth ₹3,089 crore under the distribution scheme. Between January and November 2025, the corporation extended credit worth ₹7,841 crore to 2,440 businesses for raw material purchases. Queries sent to the MSME ministry and NSIC on 27 August remained unanswered.
The expansion comes amid growing procurement challenges for MSMEs. A survey of 27,045 businesses by the India SME Forum in early August found that 55% of respondents faced issues related to price volatility or a lack of transparency in procurement prices. The same survey reported that 68.7% of MSMEs wanted to procure raw materials digitally.
Vinod Kumar, president of the India SME Forum, noted that disruptions from the West Asia conflict and the shipping crisis have heightened uncertainty around material availability, delivery schedules, and freight costs. He said government-backed digital procurement assistance could help small enterprises gain collective purchasing strength and supply-chain resilience.
A second government official said demand for raw material assistance rose significantly during the peak of the West Asia conflict compared to the same months a year earlier. The ministry is now collecting data from field offices to widen the range of materials covered and extend the schemes to more regions and sectors.
India has about 92 million registered MSMEs, which contribute roughly 30.1% of the country's GDP, 35.4% of manufacturing output, and 48% of trade. Experts say the schemes could benefit many more businesses, given the capital constraints most small enterprises face.
Veeramani C., professor and director at the Centre for Development Studies in Thiruvananthapuram, said MSMEs individually lack negotiating power to secure better prices, a gap that government-led bulk procurement can readily fill.