The Indian Small and Medium Enterprises (SME) sector has constantly acted as the safeguard for the Indian economy by providing it flexibility to prevent global economic shocks and adversities. It has emerged as a highly vibrant and dynamic sector of the Indian economy over the last five decades.

SMEs not only play crucial role in providing large employment opportunities at comparatively lower capital cost than large industries but also help in industrialization of rural areas. The Indian MSME sector is the backbone of the national economic structure as the Sector consisting of 36 million units and as of today, it provides employment to over 80 million persons. The Sector through more than 6,000 products contributes about 8% to GDP besides 45% to the total manufacturing output and 40% to the exports from the country.

The Micro, Small, and Medium Enterprises Development (MSMED) Act, 2006 provided for facilitating the promotion and development and enhancing the competitiveness of MSMEs (commonly referred to as SMEs) and for the related matters. Considering the role of SMEs in nation building and their potential in terms of generating employment and income as well as fostering innovation and enterprise, it was imperative that necessary enabling environment should be provided for these enterprises to flourish.    

The Prime Minister's Task Force (Jan. 2010) had recommended the setting up of a dedicated Stock Exchange/ Platform for SMEs. SEBI has also laid down the regulations for the governance of SME Platform. To this initiative, the Bombay Stock Exchange and the National Stock Exchange have established BSE SME Platform and EMERGE respectively. The Stock Exchanges are continuously working towards making the platform most suitable for companies to become big from small by raising funds from Capital Market.