Industry Odisha Bureau, Aug 30: India’s MSME ministry plans to sharply expand raw-material procurement assistance for small businesses. NSIC’s assisted procurement volume will rise from 300,000 to 900,000 tonnes annually. The threefold increase targets fiscal year 2030, according to two government officials. Smaller businesses currently face mounting procurement pressures and volatile material input costs. The expanded scheme aims to strengthen MSMEs’ access to affordable raw materials.
The National Small Industries Corporation runs these raw-material assistance and distribution schemes. NSIC aggregates MSME demand and procures materials in bulk at lower rates. The schemes cover commodities ranging from metals and coal to construction materials. Bulk procurement can lower commodity prices by roughly three to five percent. It also helps MSMEs reduce broader supply-chain costs, industry estimates generally suggest.
NSIC distributed 364,374 tonnes of raw material worth ₹3,089 crore in 2025, records show. It also provided ₹7,841 crore in credit to 2,440 businesses last year. That credit supported raw-material procurement between January and November 2025, ministry data show.
A survey of 27,045 MSMEs highlighted widespread procurement difficulties across smaller businesses. Fifty-five percent cited price volatility or unclear procurement pricing, the survey found. Nearly 69% of respondents said they preferred procuring raw materials digitally instead. Disruptions linked to the West Asia conflict and shipping delays worsened uncertainty.
Vinod Kumar of India SME Forum called digital procurement assistance a powerful enabler. He said demand aggregation and verified suppliers could boost smaller enterprises’ bargaining power. Better price transparency and affordable credit could further strengthen supply-chain resilience overall.
India has approximately 92 million MSMEs, spanning services, manufacturing and trading sectors. These registered businesses contribute roughly 30.1% of India’s overall gross domestic product. They also account for 35.4% of manufacturing output and 48% of trade.
Officials noted rising demand for assistance during the West Asia conflict period. The government now plans to widen coverage across more regions and sectors. Field offices are collecting data to guide this planned geographic expansion, officials said. Veeramani C. of the Centre for Development Studies said MSMEs lack bargaining strength. Government aggregation, he said, can help meaningfully fill that structural procurement gap. Commodity prices remain volatile globally, and logistics costs could still stay elevated. Demand aggregation alone cannot eliminate every procurement risk facing smaller businesses today. Success will ultimately depend on reliable suppliers, transparent pricing and efficient implementation.
