What are SSIs in India?

crop craftsman changing knife in jointer

Small Scale Industries or SSIs hold an important place in the Indian economy. These industries are indulged in varied business activities like Production and manufacturing of daily use items and certain services, albeit at micro-scale. These industries are generally labour-intensive with minimal technologies and modern tools at their disposal. The investment in basic machinery in such sectors is generally below INR 1 crore.

In this blog, I will be discussing SSIs, their benefits and the registration of SSIs in India.

Let’s start with understanding SSI.

SSIs in India

Even before the Europeans arrived in India and with the Industrial Revolution, India thrived with multiple cottage industries. Given India’s vast population, these industries continue to exist in India by adopting new products, new production methods, and the help of Government.

As these industries focus more on the human workforce than technology, they are a backbone of rural and semi-urban India. They play a crucial role in employing lacs of skilled and un-skilled labours in India. Moreover, their financial contribution in the economy is also remarkable, given their widespread network throughout the nation. In India, where more and more people are losing their jobs due to the arrival of new technology, these SSIs prove to be of great value in providing much-needed employment. These industries boost people’s spending by putting money in their hands through jobs and keeping the wheel of the economy turning.

Here is the list of some Small Scale Industries in India

  1. Stationery shops indulged in wholesale and retail trading of daily use stationery items.
  2. Paper bag manufacturing units
  3. Plastic item manufacturing units like buckets, combs, plastic utensils, etc
  4. Small toy manufacturing units
  5. Photography and Videography studio
  6. Tailor shops.
  7. Kirana shops
  8. Salons

Role of SSIs in the Indian Economy

Government of India has always recognized the impeccable role of SSIs in the Indian Economy and Social life. With the launching of Make In India initiative, these industries became even more important as they have a major contribution in almost every sector of the Indian economy. They are positively impacting the exports from India, changing the trade-deficit ratio.

This is the reason Government is focused on providing a suitable environment for these industries to flourish.

Below is the list of other important roles of SSIs in the Indian economy.


The contribution of SSIs in the Indian GDP stands at around 40%. These numbers are massive, given they mostly fall under unorganized sectors. SSIs are responsible for the spurt in the growth of Indian economy post-1992 reforms.


As mentioned earlier, these industries are labour-intensive. Hence they employ a large section of Indian society that lacks primary or higher education. Moreover, they also provide jobs to various skilled and unskilled individuals.


SSIs play a vital role in exports from India. The contribution of SSIs in exports is almost 50%, making them a crucial player in the domestic and global market. If India wants to realize the dream of becoming 5 trillion USD-economy, this sector can be of great assistance.

Social role

A large number of SSIs are offering opportunities to the women of India to become self-reliant. Thus, they have become a major force in boosting women’s social and Economic situation in India.

Distinctive features of SSIs

  1. Single individuals generally own sSIs. If a bit more investment is needed, they can exist in the form of Partnership firms.
  2. Their dependence on technology is minimal; hence they are labour-intensive.
  3. The involvement of the owner in daily business operations is maximum. Almost all of these operations are managed by the owner or under the direct supervision of the owner.
  4. Due to minimal investments and tools, they are highly scalable and adaptable to their changing environment. In case of any changes in the Government policy or Business environment, they don’t face major issues.
  5. Their business operations generally depend on local demands. So if the local demand dies out, they might struggle to survive.
  6. They fully utilize the locally available resources, boosting the people’s local economy and living standards, even in the remotest locations.

Conclusive thoughts

Even with the whole world going Digital, SSIs have a crucial role to play in the transformation of India. This is the reason why the Government is offering a lot of subsidies and various schemes for them. If you too own any SSI, you must take benefits of all these schemes.

But, to avail these benefits, it is mandatory to register your SSI with Government. In the next blog, I will be explaining about SSI registration process in detail. So if you are planning to register your SSI, we would recommend reading it here.

Meanwhile, if you have any other queries about SSI, feel free to reach us.

Probal Consulting Group is a leading Taxation, Accounting and Compliance firm that helps individuals, MSMEs and other businesses manage their accounting, taxation regulatory compliance affordably.

  • +91 8866157880
  • info@probal.in
  • 305, Aakansha Complex, Opp. J K Honda, 10/11 Vijay Plot Corner, Gondal Road, Rajkot 360002.