The Indian micro, small and medium enterprises (MSME) sector employs about 1.2 crore people, and by 2025, the industry is expected to generate over two lakhs new jobs, a report showed on Thursday.

The new job opportunities will span across the services sectors and manufacturing sectors, both across urban and rural India, according to the report by LB Services, a global technology and digital talent solutions provider.

Notably, many emerging industries under the MSME umbrella like e-commerce, logistics, and supply-chain are also expected to witness a surge in new employment.

“Home to 633.9 lakh enterprises, India has the strongest growing cohort of micro, small and medium enterprises, generating mass-scale employment across India, especially in tier 2 and 3 regions,” said Sachin Alug, CEO, NLB Services.

Today, small businesses which comprise 96 per cent of industrial units are the second largest employment generator in the country.

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Overall the MSME ecosystem contributes to over 33 per cent of the GDP, driving 62 per cent of the employment on the domestic front.

“However, the average contribution of MSMEs in employment generation across other emerging economies stands at 77 per cent, indicating untapped potential that can be explored in India,” Alug added.

Driven by the surge in digitisation and the post-pandemic shift in the workforce, MSMEs will witness an increased demand for roles in construction, manufacturing, transportation, and supply-chain, etc.

The majority of the new roles will emerge across states like Andhra Pradesh, Gujarat, Karnataka, Maharashtra, Tamil Nadu, and Telangana, said the report.

Women-led enterprises stand at 20.44 per cent of micro-businesses, 5.26 per cent of small businesses, and 2.77 per cent of medium businesses.

Compared to male-owned MSMEs, women-led MSMEs have registered better growth in income, said the report.

“Over the next five years, we expect another 20-25 per cent surge in women-led MSMEs, which will further complement job creation,” it added.

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