Differences Between MSME And NSIC

. 6 min read
Differences Between MSME And NSIC

From ancient times India has been a merchant country with a treasure of invaluable potential and fine knowledge. Fast-forward to 2020, we are a country with more than 500,000 startups with a progressive growth rate of 12-15% every year. As of 2019, more than three startups take off every day.

These numbers are indeed impressive, and the government has been very considerate towards nurturing the growth of such pilots. Therefore, many schemes have been introduced to foster the development of such organisations.

The government introduced provisions like National Small Industries Corporation (NSIC) in 1995 and the MSMED Act for MSMEs in 2006.

Most startups in India are barely aware of these provisions and cannot distinguish between them either. It is easy to get confused if you are not familiar with these concepts. Let’s understand these provisions and learn about the differences that set them apart.


NSIC is a public undertaking body established by the government to foster the growth of small scale industries. It supports such organisations with finance, marketing, technology, and other services.

Benefits of NSIC

As mentioned above, the NSIC supports small and micro businesses with different benefits; here are some important ones:

1. Marketing

  • NSIC allows registered companies to advertise their businesses in the international fairs organised in different countries across the world.
  • Registered businesses are also allowed to participate in the business fairs, exhibitions, and trade fairs organised in India.
  • To market the business, registered companies can partake in Tech-Mart exhibitions organised by NSIC.
  • Moreover, these companies are also allowed to participate in the buyers-seller meet, where they get the opportunity to meet the industries and government associations.

2. Financial aid

  • Companies that are registered under the NSIC get assistance from the government to obtain raw materials that can be used for business. These raw materials are sourced from agencies that are under the aegis of the government. While others belong to the National and International sellers category.
  • These companies also get support from the banks while applying for loans to help them make valuable upgrades to their business.

3. Technology support

  • The government also supports the businesses under NSIC with the latest innovation and technologies.
  • Companies can attain skill development training from different government programs.
  • The government also supports these companies with computer-aided product designing.
Businessman with folded arms and cardboard box with question marks covering head on grey background

Documentation needed for NSIC registration

For a business to get registered under NSIC, these are the documents required.

  • Identity proof of the owners (Aadhar card, Driving License, and Voter ID)
  • The incorporation certificate of the company
  • PAN card of all the directors
  • Address proof of the registered office (Lease agreement and Letter of Possession)
  • If the land is owned by the company, a utility bill has to be submitted during the registration process
  • If the premise is leased, the company must submit the rent agreement along with a No Objection Certificate (NOC) from the Landlord
  • Memorandum of Association
  • Article of Association (AOA)
  • A brief description of the product and services that are to be registered under the NSIC registration
  • Measures installed for testing Quality Control Standards in the company.
  • Statement of Operation of the last three years, approved by a Chartered Accountant
  • A Copy of the MSME certificate
  • Company’s Financial statements assessed by an authorised person
  • A receipt of all the machinery at the plant

Apart from these, there are other documents required for the NSIC registration process.

Application process for NSIC

The NSIC application process is quite elaborate, and each procedure has to be completed carefully to avoid any kind of errors or complications.

1. Online application

To initiate the registration process, a company must register itself on the NSIC website under the Single Point Registration Scheme for Government Purchase (SRPS).

2. Details and documents

The online registration process requires the company to fill in some of the important details about the company. This helps the NSIC learn about the company and its nature of business. Here are some of the details that a company has to provide to get registered under NSIC.

  • Name of the organisation
  • PAN number of the company that has to be registered
  • Nature of Business
  • Udyog Aadhar number
  • Inspecting agency
  • GST number
  • Category of majority products
  • Preferred NSIC branch
  • Branch details:
  • After completing the online registration process, the company receives all the information about the assigned NSIC branch. It comprises the branch name, timings, address, and contacts that come in handy for correspondence.
  • Document submission at the branch:
  • A representative of the company has to visit the NSIC office with original documents for verification.

Certificate Issuance

Once the NSIC verifies all the documents, the NSIC Registration Certificate will be provided to the applicant company.


India’s 63 million MSMEs are regulated under the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006. The act was incorporated to support the entire MSME sector through schemes, incentives, and subsidiaries.

According to the act, the MSME sector has been divided into two categories.

  1. Manufacturing Enterprises
  2. Service Enterprises

The table below provides a better understanding of the different sizes of MSMEs that can be registered under this act.




Manufacturing Enterprises

INR 25,00,000

Lesser than INR 50,000,000

Lesser than INR 100,00,000,00

Service Enterprises 

Lesser than 10,00,000

Less than 200,00,000

Less than INR 500,00,000

Benefits of MSME

MSMEs gains mostly include financial gains. However, here is an overview of the benefits that a company can gain under the MSME act:

  • Owing to the Credit Guarantee Fund Scheme, the companies registered under the MSME Act can avail collateral-free loans from all kinds of financial institutions.
  • These companies have higher chances of acquiring tenders from the Government of India.
  • Owing to the business type, the companies can also avail tax benefits.
  • In the initial years of registration, these companies are exempted from paying Excise duty based on the business types.
  • Some other financial benefits include Octroi refunds and stamp duty benefits.
  • MSME companies also get concessions on electricity bills if they send an application to their respective Electricity Departments.
  • Most of the MSMEs face financial problems when the buyers delay the payments. In such situations, MSMEs registered under the act get some flexibility for repayment.
  • Companies with an MSME certificate are eligible for a 50% subsidy while applying for patent certification to the respective department.
  • The government provides all kinds of support to the MSMEs both on the National and International level. Companies are also eligible for the Industrial Promotion Scheme (IPS).
  • MSMEs also get a 1% exemption on the bank overdraft interest rates.

Documentation needed for MSME

  • MOA/Partnership Deed
  • Proof of address of the registered office
  • Sales and purchase bills
  • The receipts of plants and machinery installed the company.
  • The industrial license issued to the company
  • Cancelled cheque
  • National Industrial Classification Code
  • Address and identity proof of all the directors

Application process for MSME

The application process for MSME is not very different from NSIC. To initiate the procedure for MSME, a company has to apply online from the MSME portal.

The applicant company has to create an account on the Udhyam registration website by entering its 12-digit Udhyog Aadhar Number along with the name of its directors. To proceed further, the aadhar number has to be validated by entering the OTP generated by clicking on the “Validate and Generate OTP” button.

After the initial process, the applicants have to fill in the following details.

  • Name of the organisation
  • Nature of the organisation’s business
  • If the company is a private company or a Cooperative Company or an LLP, its PAN card details have to be mentioned on the application.
  • The location of the Plant or business operations unit.
  • The date on which the company commenced its operations
  • Company’s registered address with details like state, district, and PIN code.
  • Current account details
  • The number of employees in the organisation
  • Category, the organisation, falls into
  • The value of plants and machines installed in the organisation
  • Location of the District Industries Centre (DIC)
Group team of confused thoughtful against blue background

Certificate Issuance

Once the application is completed and submitted, the respective will issue an MSME certificate to the applicant company.

Benefits like the ones mentioned above can be a boon for growing businesses. However, it is imperative to understand the differences between the two schemes and apply for the right one.

Also read:

1) MSME – Industries that form a Foundation for a Robust Economy
2) How is the Government helping Small Businesses & Startups fight the financial crisis?
3) How To Get Small Business Loan From Government?
4) What are Some Beneficial Government Policies for Small Home-Based Businesses in India?

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