When you are applying to Udyam Registration or opening an MSME, you can find this term and refer to National Industrial Classification (NIC) codes. These codes are necessary in classifying businesses according to the activities they carry out either manufacturing, trading or services.

In this guide, we will define what a national industrial classification code is, the essence of having such a national industrial classification code, and how your manufacturing or service company can select the right national industrial classification code in your business.

national-industrial-classification-codes

What is National industrial classification?

National Industrial Classification or NIC is a system that gives a clear picture of classifying and organizing all economic activities. It gives an industry a common framework such that the collection, analysis, or policy formulation becomes simplified.

The NIC system, introduced by the Central Statistical Organisation (CSO) under the Ministry of Statistics and Programme Implementation, is based on international standards which include International Standard Industrial Classification (ISIC).

What is the National industrial classification code?

National industrial classification code (NIC Code) is a numeric system used to identify a specific business activity. Individual NIC codes allow the government to easily track and control businesses as each code is a representation of an industry or a service.

In filling up Udyam Registration or applying for other government schemes, you should choose the appropriate NIC code of your business activity.

For example:

  • NIC Code 10711 - Manufacturing of bread
  • NIC Code 45201 - Motor vehicle repair
  • NIC Code 62011 - Software development services

NIC Code 2008 - The Newest Version

The most common of NIC codes is the NIC Code 2008 that is used to conform to international standards. This version divides economic activities into 21 sections, 88 divisions, 238 groups and more than 600 classes.

The businesses incorporating Udyam will need to select the NIC code using this new version.

What is the Importance of National Industrial Classification Codes?

It is very important to choose the right NIC code because:

  • It specifies the kind of business you have (manufacturing, service or trading)
  • Assists in government policy making decisions and economic surveys
  • Decides which MSME benefits/schemes your business is eligible to receive
  • Vital to taxation, licensing and compliance

Improperly entered NIC codes may cause registration problems or the refusal of applications.

A National Industrial Classification Code of manufacturing businesses

Your business may involve production or processing of goods, in which case you will have to make a choice on the right national industrial classification code of manufacturing.

Here are a few.

  • 10101 – Processing and preserving of meat
  • 10712 – Manufacture of biscuits and cakes
  • 14101 – Manufacture of wearing apparel
  • 22111 – Manufacture of tires and tubes
  • 23921 – Manufacture of bricks

Codings under manufacturing normally lie between sections C (Manufacturing) in the NIC 2008 classification.

How can you get the Right NIC Code for your business?

To choose the proper NIC code follow the following steps:

  • Define Your Principal Business Activity – Manufacturing, service or trading?
  • Refer to NIC Code 2008 List - As is available on official government websites and on MSME registration websites.
  • Match Your Activity – This is your main business activity and you should select the code that best indicates it.
  • Add Secondary Exercises - If you carry out various activities, you can use secondary NIC code during the registration process.

Frequently Asked Questions on NIC Codes

Yes, when your business is an act of multiple activities, you can add other NIC codes in the process of Udyam registration.

The registration will face obstacles or rejection. Always note that you select the appropriate code that can be in line with the main activity.

The full list can be found on government sites like the MSME portal and on other sites like https://www.udyam-registration.org/

Conclusion

Knowledge about national industrial classification codes is imperative to all entrepreneurs seeking Udyam Registration. With your preferred NIC code you are guaranteed of easy registration, adherence with government standards and access to MSME incentives.

If you’re still confused about what is national industrial classification code or need help selecting the right one, visit https://www.udyam-registration.org/ and get expert assistance.