Surety Bonds Unlock ₹1.13 Lakh Crore for MSMEs, Boost India's GDP: AxiTrust

In a move to empower Micro, Small and Medium Enterprises (MSMEs), the government has revised the classification criteria. The investment limit will be increased by 2.5 times, and the turnover limits will be doubled, allowing a larger number of businesses to benefit from MSME schemes.

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CNBC TV18•17-12-2025, 16:48

Surety Bonds Unlock ₹1.13 Lakh Crore for MSMEs, Boost India's GDP: AxiTrust

•Insurance-backed surety bonds can release ₹1.13 lakh crore liquidity for MSMEs, replacing bank guarantees.
•This could boost India's GDP by approximately 0.9%, according to an AxiTrust report.
•Currently, ₹15 lakh crore (4.5% of GDP) is blocked in bank guarantees, hindering MSME operations.
•Regulatory changes (IRDAI 2022, government rules) and digital verification drive surety bond adoption.
•Surety bond underwriting grew from ₹5,000 crore (April 2024) to ₹60,000 crore (Sept 2025), mainly in construction and infrastructure.

Why It Matters: Surety bonds offer significant liquidity to MSMEs, potentially boosting India's economy.

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