Micro, Small and Medium Enterprises (MSMEs) constitute the backbone of the Indian economy, contributing significantly to employment generation, industrial output, exports, and regional development. In the context of Atmanirbhar Bharat, India’s vision for self-reliance and sustainable economic growth, the role of MSMEs has assumed renewed strategic importance. This paper examines the multifaceted contribution of MSMEs in achieving the objectives of Atmanirbhar Bharat by enhancing domestic production capacity, reducing import dependence, fostering innovation, and promoting inclusive growth. The study analyzes the structural strengths of the MSME sector, including its flexibility, low capital requirements, and capacity for localized value creation, while also highlighting key challenges such as limited access to finance, technological gaps, skill shortages, and regulatory constraints. Government initiatives such as Make in India, Startup India, PMEGP, Emergency Credit Line Guarantee Scheme (ECLGS), and digital platforms like Udyam Registration and GeM are critically reviewed to assess their effectiveness in strengthening MSME competitiveness and resilience. Using secondary data from government reports, policy documents, and published literature, the paper evaluates the sector’s role in employment generation, export promotion, and post-pandemic economic recovery. The findings suggest that MSMEs are central to realizing the Atmanirbhar Bharat vision, provided there is sustained policy support, improved credit flow, technological upgradation, skill development, and integration into global value chains. The paper concludes with policy recommendations aimed at empowering MSMEs as engines of self-reliant and inclusive national development.