Understanding NIC Codes for MSME: Meaning, Significance, and List of Codes

NIC code, short for the National Industrial Classification Code, is a unique identification number assigned to different industries in a country. This classification code is crucial in determining your business type, including the main and sub-sector your company comes under. 

As of now, the NIC code list has 21 main divisions ranging from A to U, with 99 sub-divisions. Knowing your NIC code can come in handy for businesses, be it services, manufacturing, or trading. Wondering how? Well, the same is a requirement for your Udyam portal registration. 

What is a NIC Code?

As mentioned, the NIC code is a unique classification code that categorises businesses as per their activities. NIC code 2008 has been in use since 2014 and helps businesses comply and easily register on the Udyam portal. 

Brief History

In 1962, SIC or Standard Industrial Classification was introduced to categorise different industries. It was a 4-digit classification that was revised in 1970. The revisions were a result of major changes in the structure and setting of the industries. This revised system came to be known as NIC in 1970. 

Post the 1970 revisions, the NIC rules kept on changing to help the classification stay relevant even in the changing economic circumstances. NIC 2008, was the most recent classification that is being followed until now. 

NIC Code List

You can also find your NIC code on the Udyam registration portal. Here is a quick list of a few codes to understand your business categorisation. 

NIC Code List	Industries
A	Agriculture, fishing, and forestry
B	Mining & Quarrying
C	Manufacturing
D	Electricity, steam, gas, and air supply
E	Water supply and water management

NIC Code for Manufacturing

NIC code lists for manufacturing are listed in section C.

Here are some examples of NIC codes from the manufacturing sector:

Division	Manufacturing	NIC Codes
10	Food product manufacturing	10101 to 10809
15	Leather product and related manufacturing	15111 to 15209
20	Chemical and chemical items manufacturing	20111 to 20304

NIC Code for Services

Here are some examples of NIC codes from the services sector:

Section J deals with computer programming and related activities. Here are some of the related NIC codes:

62013: offering software support and maintenance to customers. 

62012: Designing webpage 

What is NIC 4 Digit? 

As mentioned, NIC 2008 is a 5-digit code. Here, the starting two digits are the classification of division, and the following three digits are the group division. The NIC 4 Digit is nothing but the class of the business. 

Let’s understand this with an example. 

Section G deals with retail trade except for the trade of bikes and motor vehicles. Let’s understand Division 47 and Group 471. 

They further are classified into 4711, which is a retail sale in non-specialised stores. 

4719 refers to other retail sales in non-specialized stores. 

Where is the NIC Code Used?

Here are two popular cases where NIC codes are popularly used:

• Udyam Registration 

Are you thinking of applying or registering on the Udyam portal? Well, you may need your NIC code to start. Registration on this portal can help you be identified as micro, small or medium enterprises. Based on the same, you can avail the benefits of different financial programs, government schemes, and much more. 

• Company/ LLP Registration 

Even to register your company on the portal of the Ministry of Corporate Affairs, you will need to complete your application with a NIC code. 

Importance of NIC Code

Launched as a part of MSMEs registration for Udyam, the NIC code ensures the identification, categorisation and tracking of businesses in the most accurate manner. This categorisation, as mentioned, proves to be beneficial to identify the potential beneficiaries of a certain government scheme. 

By submitting your NIC code, you help the authorities understand your business nature if it is involved in services, manufacturing, or more. Thus, in turn, empowering the government to launch and experiment with sector-related schemes. 

How to Generate Udyog Aadhar NIC Code

Here is a quick guide to help you understand how to generate your Udyog Aadhar NIC Code. 

• Once you start filling out your Udyog Aadhar form, try and observe that the same is divided into several numerical sections. For instance, section 9 is for bank data. 
• Now quickly find your NIC code using the keywords for your industry and fill the same. 
• Once done, try submitting your 2-digit, 4-digit and 5-digit NIC code. 
• You may also edit your previously incorrectly filled NIC code using Udyog Aadhar. Don’t forget to generate your acknowledgement for the same. 

Steps to Apply for NIC Code for Business Registration

As mentioned earlier, to complete your Udyam registration, you’ll need your NIC code. Here is how to apply for the same. 

• Run a quick search for your NIC code by using suitable keywords. For example, the bakery business. 
• In case you already know your code, simply fill in your business type, and then enter your 2-digit, 3-digit, and 5-digit code. 
• Make sure to fill in the code as per the National Industrial Classification Handbook. 
• You may also choose more than one code from the handbook to cover all your business stuff. 

Important Documents Needed for MSME Application 

Filling out your MSME application can help you earn several benefits from government programs, financial support, better opportunities, and much more. However, to ensure you correctly and timely complete your application filling, make sure to keep the documents handy. Here is the list of some of these essential documents for MSME application. 

• Identify proof like Aadhar 
• PAN number 
• Your bank account details
• Details of your business activity 
• Address of your business 
• Turnover or performance details
• NIC code for MSME registration 
• Partnership details if any
• Bills and licenses for your machinery 

List of 2-digit codes of National Industrial Classification of 1987 (NIC)

Here is a quick description of a few 2-digit codes as per the NIC, 1987. 

NIC Codes	Description
20-21	Food items
22	Tobacco, beverages, and related items
23	Cotton textiles
24	Silk, wool, and other man-made textiles
25	Jute and vegetable textiles
26	Textile items
27	Wood & wood items, furniture

How to Find Your NIC Code

Are you thinking of registering your company, filling out MSME registration or UDYAM registration? Well, you might need to find your NIC code first. There are several ways to find the NIC code of your business. Here are some of them:

• Using a NIC code search tool may help. You simply fill in relevant keywords related to your business type or activity. 
• Try checking the NIC manual to understand which industry your business belongs to. 
• You may also find your NIC code on your business registration documents. 
• Scrolling on MSME websites with NIC codes can also help. 

What is a NIC Code in Udyam Registration?

Choosing the right NIC code while registering on the Udyam portal can help you lock in the best benefits for your business. Let’s see how. 

• Significance of NIC Code in Udyam Registration

Here are some pointers to help you understand the relevance of NIC code in Udyam registration. 

• Business Classification 

NIC code segregates different business activities into different classes. Thus, helping the government generate specific policies and programmes that are specially designed for these business activities under MSMEs. 

• Statistical Role

The code also comes in handy in gauging the growth and performance of different MSME industries. This, in turn, can give an overview of the industrial performance based on which new initiatives can be launched. 

• For the formulation of Subsidiary Plans and More 

Based on the NIC codes, different industries are identified to be eligible for a certain subsidy or tax relaxation. 

• MSME Directory 

The compilation of NIC codes gives the government an overall understanding of existing MSMEs, their relevant details, and much more. 

• Additional Considerations

Knowing your NIC code is important for businesses of all types. However, it is also important to understand that these NIC codes may change or get updated as per the instructions of the MSME ministry. Therefore, you must always be aware and updated on such changes to this coding system. In case you’re confused, you can run a NIC code search or consult an expert. 

Conclusion 

All in all, the NIC code can be considered of crucial importance in Udyam registration. Thus, it plays a huge role in classifying businesses and helping them find suitable financial aid, government support, and much more. This effective categorisation of business activities is not only helpful for businesses finding their pathways but also helps policymakers understand different businesses and their needs. This organised classification is of significant importance in ensuring the success of businesses. 

FAQs

1. How can choosing the wrong NIC code impact your business?

It is important to fill in the correct NIC code to ensure you successfully register your business. In case, you choose the wrong code, your business registration might get delayed or even cancelled. Therefore, make sure to check and fill in the correct code. You may use a NIC code search for the same. 

2. How do I find out if there are any updates in NIC codes?

You can easily find if there are any updates in the NIC codes on the website of the MSME ministry. 

3. How is NIC code important?

A NIC code classifies your business into different categories. Thus, helping the government to launch programs and benefits accordingly. It also classifies businesses in an organised manner to track relevant details of MSMEs.