A Beginner’s Guide to NIC Code List for MSME Registration in India

If you are planning to register your business as an MSME (Micro, Small, or Medium Enterprise) in India, understanding NIC codes is a vital step. These codes categorise business activities for government databases, which simplifies the process of identification, regulation, and policy-making. They are essential for you to ensure compliance with government regulations. 

What Are NIC Codes?

NIC codes, or National Industrial Classification codes, are standardised numeric codes developed by the Government of India to classify businesses based on their type of economic activity. They were developed by the Ministry of Statistics and Programme Implementation (MoSPI).

NIC codes help simplify data collection and policy implementation across industries. These codes are essential for businesses to specify their primary activity during registration. 

Moreover, to avail MSME benefits such as tax exemptions, subsidies, and financial assistance, you might need an NIC code. By doing so, you can easily comply with regulatory requirements for your MSME.

For example, NIC Code 241 refers to the manufacture of basic iron and steel, while NIC Code 170 denotes the manufacture of paper and paper products. A manufacturing unit might have an NIC Code like 23929 for its specific product type, and a software development company might fall under 62011.

So, understanding and selecting the correct NIC code is crucial for registering your business correctly.

Why Are NIC Codes Important for MSME Registration?

When you register your business as an MSME on platforms like the Udyam Registration Portal, you will need to provide the relevant NIC code for your operations. These codes are important for you for a variety of reasons, including:

1. Mandatory for Udyam Registration: NIC codes are required when applying on the Udyam Registration Portal to register your MSME.
2. Eligibility for MSME Schemes: NIC codes will help your business qualify for financial assistance, tax exemptions, and other government programs.
3. Sector-Specific Benefits: Certain industries get specialised support, such as subsidies or relaxed credit terms. Your NIC code will determine whether you can access these benefits.
4. Accurate Classification: It minimises errors in classification and reduces your risk of non-compliance with government policies.

How to Find Your NIC Code

The NIC code list is publicly available and can be accessed through the official Ministry of Statistics and Programme Implementation (MoSPI) website. It is also available on the Udyamassist website by the Ministry of Micro, Small and Medium Enterprises (M/o MSME). 

The code is divided into sections (A to U) and further into divisions represented by two-digit numeric codes (01-99). They are further divided into groups (three-digit numeric codes), classes (four-digit numeric codes) and sub-classes (five-digit numeric codes). Each code represents a specific sector and sub-sector of business activity.

To identify the correct NIC code for your business, first identify your primary business activity and sector. Identify whether your business is involved in manufacturing, trading, or services. 

Then, refer to official government portal like the Udyam Registration Portal or MoSPI database for accurate codes. Go through the NIC Code directory to match your primary business activity with the corresponding code. 

Then, check the subcategories for specific activities. If you are a manufacturer of footwear, for instance, NIC Code 152 under “manufacture of footwear” will be applicable to you. If you are still unsure, seek guidance from an MSME consultant or an industry expert.

Common NIC Codes for MSMEs

The following is a quick overview of commonly used NIC codes for MSME registration:

1. Manufacturing
   • 105: Manufacture of dairy products
   • 107: Manufacture of other food products
   • 241: Manufacture of basic iron and steel
   • 310: Manufacture of furniture
2. Services
   • 452: Maintenance and repair of motor vehicles
   • 551: Short-term accommodation activities
   • 620: Computer programming and consultancy activities
   • 681: Real estate activities with own or leased property
3. Trading
   • 461: Wholesale trade on a fee or contract basis
   • 471: Retail sale in non-specialized stores
   • 478: Retail sale via stalls or markets

For the full NIC code list, refer to government portals like Udyam Registration or MoSPI.

Steps for MSME Registration Using NIC Codes

Once you have identified the right NIC code, proceed with the Udyam Registration Portal. You will need to provide other details such as your Aadhaar, PAN, and business information. The, choose the NIC code that matches the primary operations of your business to avoid issues during verification. After that, upload supporting documents like bank statements or GST registration. Once processed, your business will be registered and you can get your MSME certificate.

Conclusion

The NIC code system simplifies regulatory processes and enables precise tracking of industrial activities. For businesses, it ensures transparency and eligibility for a range of MSME-specific benefits, such as, priority sector lending, collateral-free loans, and technological support and skill development initiatives.

Since registering your business as an MSME can provide numerous benefits, selecting the correct NIC code from the NIC code list is a small yet essential step in this process. With the right code, you can align your business with government schemes and ensure accurate classification for future opportunities.

For detailed guidance and to identify relevant business opportunities, visit Nexizo and consult the experts.