Why NIC Code Matters in Udyam Registration & How to Update It

With your business registered under Udyam Registration Portal, you get your own official identity as an MSME in India. This will help in getting loans and government schemes, as well as subsidies and many more benefits for your business. But one small detail will decide whether you get all of them or not – your NIC code.

This is often ignored by many business owners during registration, as they either ignore the sector of their business operation or select the wrong one. This often causes an issue of loan refusal, subsidy delay, and/or mismatch of the business certificate. This is why knowing the importance of the NIC Code is extremely significant.

In today’s article, we will describe what a NIC Code is, its importance in the process of Udyam Registration, and how you can modify the code in case of errors in a few simple steps.

What is the NIC Code?

NIC stands for National Industrial Classification. These are numbers assigned to you by the Indian government to determine the nature of business you conduct.

Every business activity in India has a certain NIC Code. For instance:

• Manufacturing concerns will have separate codes.
• Individuals have trading codes
• Service providers also have different codes 

They offer:

Exporters, IT companies, transporters, and consultants have their own set of codes

When you apply for Udyam Registration, you are asked to select the NIC Code according to the activity carried out in the business.

It says to the government that:

• What you sell
• What you manufacture
• Or what service do you provide

Hence, your NIC Code will become the business identity of your Udyam Certificate.

Why is the NIC Code so Important in Udyam Registration?

Many people think the NIC Code is just a formality. But in reality, it plays a big role in everything related to MSME benefits.

1. It decides your MSME category

The NIC Code tells whether your business is manufacturing, trading, or service-based. This affects:

• Loan schemes
• Government subsidies
• MSME benefits

If your NIC Code is wrong, your MSME type may also be wrong.

2. Banks check the NIC Code before approving loans

When you apply for:

• MSME loan
• Mudra loan
• Subsidy loan
• Government-backed finance
• The bank checks your Udyam Certificate and your NIC Code.

If the code does not match your business, your loan may get rejected.

3. Government schemes depend on the NIC Code

Many government schemes are given only to specific industries.

For example:

• Manufacturing MSMEs
• Service MSMEs
• Export-based MSMEs

Your NIC Code tells the system whether you are eligible or not.

4. It avoids legal and compliance problems

If your NIC Code is wrong, your business activity in government records becomes incorrect.

This can create problems during:

• GST verification
• Bank KYC
• Subsidy audits
• Business expansion

What Happens If the NIC Code is Wrong?

If you selected the wrong NIC Code in Udyam Registration, you may face:

• Loan rejection
• Subsidy rejection
• MSME benefits blocked
• Udyam certificate not accepted
• Problems in bank verification
• Difficulty in exporting or tender applications

That is why correcting the NIC Code is very important.

Can the NIC Code Be Updated in Udyam Registration?

Yes, you can update or change your NIC Code in Udyam Registration.

The government allows MSMEs to modify:

• Business activity
• NIC Code
• Product and service details
• You do not need to re-register your Udyam. You only need to update it.

When Should You Update NIC Code?

You should update your NIC Code if:

• You selected the wrong business category
• You added a new business activity
• You changed from trading to manufacturing
• You started providing services
• Your loan or subsidy got rejected due to a NIC mismatch

Updating the NIC Code in Udyam Registration: A Step-by-Step Process

Here is the simple process.

Step 1: Udyam Portal Access

Proceed to the Udyam Registration Website.

Step 2: Select “Update Udyam Registration”

Please select the choice to update/modify your existing Udyam certificate.

Step 3: Enter your Udyam Number

Enter the Udyam Registration Number.

Step 4: OTP Verification

OTP will be sent to your registered number or email ID.

Please enter your OTP to proceed to the login process.

Step 5: Edit NIC Code

After login:

• Look for "NIC Code List"
• Identify the appropriate NIC code for your business

You can:

• Add new NIC Codes
• Delete incorrect ones
• Business activity update

Step 6: Save and Submit

After choosing the right NIC Code, submit the form. Your Udyam certificate will be updated.

How to Choose the Right NIC Code?

To avoid future problems, choose the NIC Code that exactly matches what you do.

Ask yourself:

• Do I sell goods?
• Do I manufacture?
• Do I provide services?
• Do I do online business?
• Do I export or import?

Your NIC Code should match your real business activity, not what you plan to do in the future.

Can You Add Multiple NIC Codes?

Yes.

If your business has more than one activity, you can add multiple NIC Codes.

For example:

• Trading + Service
• Manufacturing + Export

This helps your business stay eligible for different schemes.

Benefits of Correct NIC Code in Udyam

When your NIC Code is correct, you get:

• Easy loan approvals
• Smooth subsidy processing
• Correct MSME classification
• Government scheme eligibility
• Trouble-free GST and bank verification
• Strong business credibility

Final Words

Your NIC Code is the backbone of your Udyam Registration.

It defines who you are as a business in government records.

A small mistake in the NIC Code can lead to:

• Big financial losses
• Missed government benefits
• Loan and subsidy rejection

The good news is — you can fix it easily by updating your Udyam Registration.

So, if you are facing any issue with loans, subsidies, or MSME benefits, the first thing you should check is your NIC Code.

Correct it today and enjoy the full power of Udyam Registration for your business growth.