MSME Sector Growth Slows in Chandigarh Amid Sharp Drop in Registrations

Chandigarh’s micro, small and medium enterprises (MSME) sector is showing signs of stress, with a sharp decline in the number of registered units over the past two years, raising concerns among industry bodies and policymakers.

According to official data, the number of registered MSMEs in the city has fallen steeply from more than 22,000 in 2023–24 to just 10,226 so far in 2025–26. The decline has been most pronounced in the manufacturing segment, which traditionally forms the backbone of local industrial activity.

The slowdown comes despite a significant increase in institutional credit support. Lending under schemes such as the Credit Guarantee Scheme (CGS) has risen considerably, indicating that access to finance alone may not be sufficient to sustain MSME growth in the region.

Another worrying trend is the sharp fall in women’s participation. Female employment in Chandigarh’s MSME sector has nearly halved during the same period, highlighting a setback for inclusive growth and entrepreneurship.

Industry associations have attributed the contraction to regulatory bottlenecks, rising compliance costs and limited availability of industrial space. They have urged the administration to fully implement provisions of the MSME Development Act in Chandigarh, including policy support for manufacturing units, targeted incentives and measures to encourage women-led enterprises.

Experts warn that unless corrective steps are taken soon, the weakening MSME base could impact employment generation and economic resilience in the Union Territory.