Bengaluru: It’s a finding that reaffirms Bengaluru’s status as an industrial and entrepreneurial hub. The tech city anchors Karnataka’s Micro, Small and Medium Industries (MSME) growth story, with Bengaluru Urban district accounting for 6.3 lakh enterprises and generating 51 lakh jobs, the highest in the state, according to Karnataka Economic Survey 2025-26. Bengaluru Rural and regions around host 1.1 lakh units which offer 1.1 lakh jobs.On the flip side, industries in urban and industrially developed districts, particularly those around Bengaluru, have logged robust growth, while several northern and coastal districts have shown steady — yet moderate — growth. Karnataka has 24.8 lakh MSMEs, employing over 2.3 crore as of Dec 31, 2025. Micro enterprises dominate with 24.5 lakh units, compared to 31,479 small and 2,296 medium enterprises, highlighting the sector’s dependence on small-scale operations. Beyond Bengaluru, Belagavi (1.7 lakh units, 12.8 lakh jobs), Tumakuru, and Mysuru have emerged as key contributors, while districts like Kodagu and Uttara Kannada stay far behind.Poor roads affect supplyRedefinition of MSME has shifted some larger firms into the medium category, reducing targeted support for micro and small units. Infrastructure remains a bottleneck, with poor roads in industrial areas affecting logistics and supply chains.As reported by TOI on Oct 6, 2025, Karnataka lost 1% of its exports due to infrastructure bottlenecks in Bengaluru.BP Shashidhar, vice-president of Federation of Karnataka Chambers of Commerce and Industry, said: “While policies look good on paper, industries continue to struggle due to poor infrastructure, high land costs, and rising power tariffs. Industrial areas lack proper roads and basic facilities, affecting the movement of materials and business operations. Banks are lending, but support beyond loans is limited. MSMEs produce everything from pins to aerospace components and are the backbone of large industries, but without consistent support, their growth remains constrained.” Expenses riseRahul Goyal, who owns a hardware store on SJP Road, said: “The govt has allowed traders like us to register under MSME Act, which is a good step. We’re not deriving any benefit, since most of the schemes are aimed only at manufacturers. We do not derive the benefits like discounted stall booking rates in exhibitions, collateral-free loans from banks, lower rentals, exemption from registration under GBA Trade Licence, and similar aspects. Further, in case of payment defaults by customers, there is no active mechanism in the MSME Act to recover such payments, thereby diluting the cause for traders to register under this Act.”K Ravi, senior vice-president, Bangalore Chamber of Industry and Commerce, said: “Industrial land has become expensive, forcing many micro and small enterprises to operate from privately owned areas that lack basic infrastructure. The govt must step in with affordable long-term lease or rent-to-own models, especially in Tier-2 and Tier-3 cities, along with compact, well-serviced industrial parks and plug-and-play facilities. At the same time, MSMEs face acute skilled manpower shortages, high labour compliance costs, and limited access to bank credit, as they are often seen as high-risk borrowers. A separate minimum wage framework for micro and small units, along with easier financing, is essential to sustain and grow the sector.”How they are distributed Box 1: Top five districts with most MSMEsRankDistrictTotal unitsTotal employment1Bengaluru Urban6.3 lakh51 lakh2Belagavi1.7 lakh12.8 lakh3Mysuru1.4 lakh11.5 lakh4Bengaluru Rural1.1 lakh11.7 lakh5Tumakur96,5379 lakh Box 2: Sector-wise top three districtsMicro industries Bengaluru Urban: 6.18 lakh units Belagavi: Nearly 1.7 lakh units Mysuru: 1.3 lakh unitsSmall industriesBengaluru Urban: 13,971 units Bengaluru Rural: 1523 units Mysuru: 1297 unitsMedium industries Bengaluru Urban: 1,333 units Bengaluru Rural: 145 units Dakshina Kannada: 80 unitsSource: Karnataka Economic Survey 2025-26
