Choosing the right NIC code for Udyam registration means selecting the code that best matches your business’s primary activity, as it determines compliance and Micro, Small and Medium Enterprises (MSME) benefit eligibility. The National Industrial Classification (NIC) system categorises businesses into sectors, so accuracy ensures proper recognition by the government.
Focus on what your business mainly does; not secondary activities. For instance, a manufacturer should choose a manufacturing code even if it also sells products.
An incorrect NIC code can lead to compliance issues or missed benefits, while the right one ensures smoother registration, accurate classification and access to relevant schemes and incentives under Udyam.
Udyam NIC code list 2025
On November 18, 2025, the Ministry of Statistics and Programme Implementation (MoSPI) introduced NIC 2025, replacing the NIC 2008 standard. This revision reflects major shifts in India’s economy, including the rapid growth of renewable energy, fintech, e-commerce and digital services, while also recognising traditional and emerging sectors such as AYUSH-based healthcare and the handloom industry.
A key structural change in NIC 2025 is the transition from a 5-digit to a more detailed 6-digit classification, allowing more precise identification of business activities. This improves classification accuracy, making it easier for businesses to select the correct NIC code and align with regulatory and MSME requirements.
|
Section |
NIC Code Division 2025 |
Category/Economic Activity |
|
A |
01-03 |
Agriculture, Forestry & Fishing |
|
B |
05-09 |
Mining & Quarrying |
|
C |
11-33 |
Manufacturing |
|
D |
35 |
Electricity, Gas, Steam, & Air Conditioning Supply |
|
E |
36-39 |
Water Supply, Sewage, Waste Management & Remediation Activities |
|
F |
41-43 |
Construction |
|
G |
46-47 |
Wholesale & Retail Trade |
|
H |
49-53 |
Transportation & Storage |
|
I |
55-56 |
Accommodation & Food Service Activities |
|
J |
58-60 |
Publishing of Books, Newspapers, Periodicals, & Other Publishing Activities |
|
K |
61-63 |
Telecommunications, Computer Programming, Consultancy, Computing Infrastructure, & Other Information Service Activities |
|
L |
64-66 |
Financial & Insurance Activities |
|
M |
68 |
Real Estate Activities |
|
N |
69-75 |
Activities of Head Offices & Management Consultancy Activities |
|
O |
77-82 |
Administrative & Support Service Activities |
|
P |
84 |
Public Administration & Defence; Compulsory Social Security |
|
Q |
85 |
Education |
|
R |
86-88 |
Human Health & Social Work Activities |
|
S |
90-93 |
Arts, Sports, & Recreation |
|
T |
94-96 |
Other Service Activities |
|
U |
97-98 |
Activities of Households as Employers; Undifferentiated Goods- and Services-Producing Activities of Households for Own Use |
|
V |
99 |
Activities of Extraterritorial Organisations & Bodies |
Structure of the NIC code for MSME
The NIC 2025 follows a hierarchical structure that classifies business activities across five levels; Section, Division, Group, Class and Sub-Class, moving from broad categories to highly specific classifications.
This structure helps businesses accurately identify their primary activity, ensuring correct NIC code selection for MSME registration and regulatory alignment.
|
Description |
NIC 2008 |
NIC 2025 |
|
|
Sections |
Alphabetic (broad economic categories) |
21 (A to U) |
22 (A to V) |
|
Divisions |
2-Digit |
88 |
87 |
|
Groups |
3-Digit |
238 |
257 |
|
Class |
4-Digit |
403 |
463 |
|
Sub-Class |
6-Digit (nationally defined) |
1304 |
1887 |
How to choose the right NIC code for your MSME
Choosing the right NIC code means mapping your primary business activity step by step within the NIC 2025 structure to ensure accurate classification and MSME eligibility.
Example: Retail business selling ready-made garments
-
Step 1: Identify the section (broad activity)
This is a trading activity, not manufacturing. So, it falls under Section G – Wholesale and Retail Trade.
-
Step 2: Identify the division (2-digit)
Since you sell directly to customers, it is retail. So, select Division 47 – Retail Trade.
-
Step 3: Identify the group (3-digit)
Your products fall under general goods such as clothing. So, choose Group 477 – Retail sale of other goods.
-
Step 4: Identify the class (4-digit)
Narrow it down to clothing-related products. So, select Class 4771 – Retail sale of clothing, footwear and leather articles.
-
Step 5: Identify the sub-class (6-digit)
Specify the exact product type; ready-made garments. So, choose 477101 – Retail sale of readymade garments.
Final NIC Code: 477101 – Retail sale of readymade garments
Importance of NIC code for MSMEs
A clear understanding of the NIC code simplifies business registration and documentation while ensuring your activity is correctly classified.
- Essential for Udyam (MSME) registration: The code defines what your business does and determines eligibility for MSME status.
- Access to government schemes: Subsidies, incentives and benefits are often linked to your NIC category.
- Easier loan approvals: Banks and lenders consider your NIC code when assessing applications.
- Ensures regulatory compliance: Helps align your business with GST, Income Tax and other legal requirements.
- Accurate reporting: Authorities use NIC codes to track industry data and economic trends.
- Supports business credibility: A correct code presents your business as organised and reliable to regulators and financial institutions.
Conclusion
Your NIC code for Udyam registration should match your primary business activity as precisely as possible, as it directly affects your eligibility, compliance and access to MSME benefits. Taking the time to verify the correct code, and reviewing it as your business evolves, helps avoid classification errors and missed opportunities.
Once your classification is accurate, maintaining consistent records becomes just as important. Using a solution like TallyPrime helps ensure your business data stays organised, compliant and aligned with your NIC code, making reporting and regulatory processes smoother as your MSME grows.
