Reported employment under the UDYAM registration portal crossed around 8.04 crore in FY2025-26, marking a sharp rise from 6.91 crore in FY2024-25 and 5.45 crore in FY2023-24, according to a written reply in the Lok Sabha by Minister of State (MoS) for MSMEs Shobha Karandlaje.
The figures suggest a steady year-on-year increase in Ministry of Micro, Small and Medium Enterprises of India (MSME)-reported jobs over the last three financial years, highlighting the growing role of registered enterprises in India’s employment landscape.
“The UDYAM portal data shows more than 8.04 crore employment reported by MSMEs in FY2025-26, up from 6.91 crore and 5.45 crore in the previous two years,” Karandlaje informed the House in her reply, underlining the rising trajectory of MSME-linked employment. The data pertains to jobs reported by enterprises that have registered on the UDYAM ecosystem, and reflects only those units that have formally declared employment figures.
Uttar Pradesh tops state employment with 1.18 cr jobs
Among states, Uttar Pradesh reported the highest MSME employment under UDYAM in FY2025-26 at 1.18 crore, consolidating its position as the country’s largest MSME employer on the portal. It was followed by Maharashtra with 67.97 lakh reported jobs, Tamil Nadu with 61.47 lakh, Telangana with 60.56 lakh and Bihar with 55.54 lakh, indicating a broad geographical spread of MSME employment across north, south and eastern India.
“These numbers show that Uttar Pradesh is currently the leading state in terms of MSME employment reported on UDYAM, followed by major industrial and trading hubs such as Maharashtra and Tamil Nadu,” the reply noted, underscoring the importance of both traditional manufacturing centres and emerging MSME clusters in driving job creation.
Trading emerges as largest employer
A sector-wise breakup of the FY2025-26 data shows that trading has emerged as the single largest source of MSME employment under UDYAM, with 2.98 crore jobs — more than services and manufacturing. Services accounted for 2.57 crore reported jobs, while manufacturing units reported 2.50 crore, indicating that trading enterprises currently employ a bigger share of workers within the UDYAM ecosystem than factory-based units.
“The data suggests that trading activities have become the most significant contributor to reported MSME employment, outpacing both manufacturing and services,” the ministry reply observed, signalling a possible structural shift in MSME job patterns towards commerce and distribution. For policymakers tracking industrialisation and value-added production, this tilt towards trading may raise questions about the depth of manufacturing-led employment growth.
Despite the overall national increase, the reply also flagged notable declines in reported MSME employment in a few states between FY2024-25 and FY2025-26. Andhra Pradesh’s reported MSME employment fell steeply from 70.08 lakh in FY2024-25 to 36.66 lakh in FY2025-26, while Karnataka’s numbers dropped from 65.57 lakh to 50.87 lakh over the same period.
Punjab saw a particularly sharp fall, with reported MSME employment sliding from 28.60 lakh in FY2024-25 to 14.96 lakh in FY2025-26, effectively halving in a single year. The written reply did not elaborate on the reasons behind these state-level declines, leaving open questions on whether they stem from enterprise closures, reclassification, under-reporting or changes in registration behaviour.
Kerala closures and enterprise survival
The question in the Lok Sabha also sought details on the sustainability and quality of employment generated by newly established MSMEs, including their survival rate and the number of enterprises that had ceased operations, with a specific focus on Kerala. In response, the government stated that 4,252 MSMEs had closed or shut down in Kerala over the past three years, compared to around 4.61 lakh MSMEs registered in the state during the same period.
This indicates that, at least on the basis of registrations versus closures, a relatively small fraction of Kerala’s MSMEs have officially reported shutting down, though the reply did not provide a detailed survival rate or year-wise breakdown of closures. The absence of granular data on how long these enterprises stayed afloat or the sectors in which closures were concentrated leaves key questions unanswered for analysts studying MSME resilience.
MSMEs, it’s time to get recognized!
Register your enterprise on the Udyam Portal and unlock access to government schemes, credit, and more.#UdyamiBharatViksitBharat #MSME #entrepreneur #employment #Empowerment pic.twitter.com/BG5enmq9Ih— Ministry of MSME (@minmsme) July 22, 2026
No data on job quality or youth employment
Crucially for labour-market assessment, the reply did not offer any evaluation of the quality of jobs generated under UDYAM, such as wage levels, job security, benefits or formalisation status. It also did not provide a separate breakup of youth employment, even though the question sought information on the sustainability and quality of employment, particularly in the context of newly established MSMEs.
By limiting itself to headline employment numbers and basic state- and sector-wise distributions, the government’s response leaves out key dimensions that matter for understanding whether MSME jobs are stable, well-paid and formal. For a sector that is widely acknowledged as the second-largest employer after agriculture and a critical driver of inclusive growth, the lack of detail on job quality could become a focal point for future parliamentary and policy scrutiny.
