Small and medium enterprises or small and medium-sized enterprises (also: Small and Medium-sized Enterprises; acronym in the

plural: SMEs; small and medium businesses or small and medium-sized businesses, acronym: SMBs; and variations thereof) are companies whose headcount or turnover falls below certain limits. The abbreviation "SME" occurs commonly in the European Union and in international organizations, such as the World Bank, the United Nations, and the WTO. The term "small and medium businesses" or "SMBs" is predominantly used in the USA. In most economies, smaller enterprises are much greater in number than large companies. SMEs are often said to be responsible for driving innovation and competition in many economic sectors

India
In India, i. A micro enterprise is an enterprise where investment in plant and machinery [original cost excluding land and building and the items specified by the Ministry of Small Scale Industries vide its notification No. S.O. 1722(E) dated October 5, 2006 does not exceed Rs. 25 lakh; ii. A small enterprise is an enterprise where the investment in plant and machinery [original cost excluding land and building and the items specified by the Ministry of Small Scale Industries vide its notification No. S.O. 1722(E) dated October 5, 2006] is more than Rs.25 lakh but does not exceed Rs.5 crore; and iii. A medium enterprise is an enterprise where the investment in plant and machinery (original cost excluding land and building and the items specified by the Ministry of Small Scale Industries vide its notification

No. S.O. 1722(E) dated October 5, 2006) is more than Rs.5 crore but does not exceed Rs.10 crore. The definition of MSMEs under the services sector is as follows: i. A micro enterprise is an enterprise where the investment in equipment does not exceed Rs.10 lakh; ii. A small enterprise is an enterprise where the investment in equipment is more than Rs.10 lakh but does not exceed Rs.2 crore; and iii. A medium enterprise is an enterprise where the investment in equipment is more than Rs.2 crore but does not exceed Rs.5 crore. The Indian Micro and Small Enterprises (MSEs) sector plays a pivotal role in the overall industrial economy of the country. It is estimated that in terms of value, the sector accounts for about 39% of the manufacturing output and around 33% of the total export of the country. Further, in recent years the MSE sector has consistently registered higher growth rate compared to the overall industrial sector. The major advantage of the sector is its employment potential at low capital cost. As per available statistics, this sector employs an estimated 31 million persons spread over 12.8 million enterprises and the labour intensity in the MSE sector is estimated to be almost 4 times higher than the large enterprises.[3]