Udyam Registration vs. MSME Certificate: Which is More Beneficial for Handicraft Businesses?

In the colorful tapestry of India’s economy, the handicraft sector holds a special place. It weaves together tradition, artistry, and entrepreneurship to create a vibrant and diverse ecosystem. The sector is a significant contributor to India’s GDP and provides employment to millions of skilled artisans. However, like any other business, handicraft ventures also require certain government registrations and certifications to avail benefits and ensure legal compliance. Two of the most common certifications in this regard are Udyam Registration and MSME Certificate. In this comprehensive guide, we will explore the intricacies of both and attempt to determine which is more beneficial for handicraft businesses.

Understanding Udyam Registration

Udyam Registration, introduced by the Indian government in 2020, is a simplified and unified process to register micro, small, and medium-sized enterprises (MSMEs). It replaced the earlier system of MSME registration and brought about several key changes, such as the classification of businesses based on investment in plant and machinery or turnover. To be eligible for Udyam Registration, a handicraft business must fall under the MSME category.

Benefits of Udyam Registration for Handicraft Businesses:

Easy Access to Credit: 

Udyam Registration provides access to various government schemes and credit facilities, including collateral-free loans. This can be a boon for handicraft businesses seeking financial support for expansion or working capital.

Government Tenders: 

Registered businesses can participate in government tenders, which can open up new avenues for growth and business development.

Subsidies and Incentives: 

Udyam-registered handicraft businesses may be eligible for subsidies, incentives, and schemes aimed at promoting the MSME sector.

Protection from Delayed Payments: 

The government has taken steps to ensure that payments to Udyam-registered businesses are made on time, providing a safeguard against late payments.

Understanding MSME Certificate

The MSME Certificate, on the other hand, is a document certifying that a business falls under the micro, small, or medium-sized enterprise category. This certificate can be obtained from the District Industries Centre (DIC) or online through the Udyam Registration portal.

Benefits of MSME Certificate for Handicraft Businesses:

Eligibility for Subsidies: 

Similar to Udyam Registration, having an MSME Certificate can make handicraft businesses eligible for subsidies and incentives provided by the government.

Priority Sector Lending: 

MSMEs often receive preferential treatment from banks, including lower interest rates and easier access to credit. An MSME Certificate can help handicraft businesses avail these benefits.

Marketing and Branding: 

Some marketplaces and platforms prioritize MSMEs, offering them enhanced visibility and marketing support, which can be advantageous for handicraft businesses.

Statutory Benefits: 

MSMEs are entitled to certain statutory benefits, such as protection against delayed payments under the Micro, Small, and Medium Enterprises Development Act.

Which is More Beneficial for Handicraft Businesses?

Both Udyam Registration and an MSME Certificate offer valuable benefits to handicraft businesses. However, the choice between the two depends on various factors, including the size and goals of the business. In most cases, it makes sense to obtain both Udyam Registration and an MSME Certificate to maximize the advantages available to handicraft businesses.

Udyam Registration is essential for accessing government schemes and benefits, while an MSME Certificate can open doors to financial advantages and preferential treatment from banks and marketplaces. Combining these two certifications can create a strong foundation for growth and sustainability in the competitive handicraft sector.

Note: You Can Apply For Print Udyam Certificate


The choice between Udyam Registration and an MSME Certificate should not be an either-or decision for handicraft businesses. Instead, it should be viewed as a strategic move to harness the full spectrum of benefits offered by the government and financial institutions. Handicraft businesses, with their rich heritage and artistic value, deserve every opportunity to flourish, and these certifications can be the keys to unlocking their full potential.

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