New Delhi, Oct 6: The Union Cabinet has approved a ₹10,000 crore SME Growth Fund, marking a major push to help promising small and medium enterprises expand their businesses, adopt new technology and build stronger positions in domestic and global markets.

The fund, approved at a Cabinet meeting chaired by Prime Minister Narendra Modi, will provide growth-oriented capital to eligible enterprises and support the emergence of Indian businesses with the potential to become future industry leaders.

Focus on businesses with growth potential

The SME Growth Fund is designed to support enterprises that have demonstrated the potential to scale but need additional capital to take the next step. The initiative will focus on areas including manufacturing, services, technology, innovation-led businesses and strategically important value chains.

For many growing businesses, access to long-term capital can be as important as traditional bank credit. Equity support can give companies greater flexibility to invest in expanding capacity, upgrading technology, developing new products and entering new markets.

Helping SMEs scale and compete globally

The new fund is expected to strengthen the ability of Indian SMEs to move beyond small-scale operations and compete more effectively in larger domestic and international markets.

By directing capital towards businesses with strong growth potential, the initiative aims to encourage investment, innovation and expansion while helping more Indian enterprises become competitive players in global value chains.

The fund was originally announced in the Union Budget 2026-27 as part of a broader three-pronged strategy to strengthen MSMEs through equity, liquidity and professional support.

Wider support for the MSME ecosystem

Alongside the SME Growth Fund, the Budget had proposed an additional ₹2,000 crore for the Self-Reliant India Fund to maintain access to risk capital for micro enterprises.

The government has also introduced measures aimed at improving liquidity for MSMEs through the Trade Receivables Discounting System (TReDS), including steps to make financing against business receivables easier and faster.

Together, these measures reflect a broader effort to address some of the key challenges faced by smaller businesses — access to capital, working capital requirements, technology adoption and professional support.

A stronger foundation for future champions

The ₹10,000 crore fund comes at a time when Indian SMEs are increasingly becoming important contributors to manufacturing, services, exports and employment. Easier access to growth capital could allow capable businesses to invest with greater confidence and expand their operations.

The government’s latest move therefore goes beyond providing financial assistance. It seeks to create an environment in which promising smaller companies can scale up, strengthen their competitiveness and eventually emerge as larger Indian enterprises.

The initiative is expected to add further momentum to India’s broader push for a stronger, more competitive and self-reliant business ecosystem.