Understanding NIC Code for Business

The NIC Code refers to the National Industrial Classification Code. It is used to identify and categorise various business activities in India. It is considered an essential part of the registration process for new businesses, including MSMEs and startups. This code helps the government understand the nature of a business. It is also used in official documentation such as GST registration, UDYAM registration, and MCA filings. Selecting the correct NIC Code ensures legal compliance and helps avoid issues during future verification or approvals. In this blog, you will learn about the NIC code for Business.  

What is the NIC Code?

The NIC Code means National Industrial Classification Code. It is a numeric system used to classify various types of economic and business activities in India. This coding system plays a crucial role in organising businesses based on their nature of work. It is managed by the Central Statistical Office under the Ministry of Statistics and Programme Implementation. The current version, NIC 2008, is aligned with the United Nations' ISIC Revision 4 standards.

The NIC Code follows a step-by-step structure. It starts with broad 2-digit categories and moves to detailed 5-digit sub-classes for accurate classification of business activities. This system helps maintain standard records for legal filings, economic analysis, and government planning. NIC 2008 is the current version, in full use since June 2014, and remains valid as of mid-2025.

Why is the NIC Code Important?

Here is the key importance of the NIC Code:

• Ensures Legal and Statutory Compliance

The NIC Code is required for various legal processes. Every business must select the correct code during GST registration, Udyam registration for MSMEs, and company incorporation through the Ministry of Corporate Affairs (MCA). Authorities use it to verify the nature of the business. Choosing the correct code from the NIC Code list ensures faster approvals, prevents penalties, and avoids mistakes. It also supports smooth government filings and compliance procedures.

• Grants Access to Government Schemes and Benefits

Government benefits are often linked to specific NIC classifications. The Ministry of MSME and Startup India offer schemes such as subsidies, tax relief, and credit support. Only businesses that choose the correct activity code from the NIC Code list can avail of these schemes. An incorrect selection may lead to application rejection or ineligibility for financial assistance.

• Helps in Economic Data Collection and Analysis

The government uses the NIC Code list to collect and organise data across industries. The Central Statistical Office (CSO) uses this information to analyse employment trends, sector-wise growth, and national income. This classification supports effective policy-making and economic planning.

• Maintains International Classification Standards

The current version, NIC 2008, matches the UN’s ISIC Rev. 4, which ensures India's data fits international standards. Businesses listed accurately in the NIC Code list help reflect India's position in global trade, investment, and statistical comparisons.

NIC Code List for Businesses

The NIC Code list categorises all business activities in five hierarchical levels:

1. Sections (2-digit + letter)

The NIC Code begins with 21 broad sections. Each section is represented by a letter from A to U along with a 2-digit number. These sections cover the main areas of economic activity. For example, Section A refers to agriculture, forestry, and fishing. Section C deals with manufacturing, while Section M covers professional, scientific, and technical services. These sections act as the foundation of the classification system.

2. Divisions (2-digit numbers)

There are specific divisions within each section. There is a total of 88 divisions across all sections. Each division serves as a major industry group. For instance, Division 13 refers to the manufacture of textiles, and Division 62 refers to computer programming and consultancy services. Divisions help narrow down the sector into more focused industry categories.

3. Groups (3-digit codes)

Groups come under divisions and add more detail. There are around 238 groups that exist in the NIC structure. Each group identifies a specific area within a division. For example, Group 139 refers to the manufacture of other textiles, while Group 262 refers to the manufacture of computers and related devices. This level allows better distinction between industries that fall under the same division.

4. Classes (4-digit codes)

Classes further divide the groups into finer categories. It has a total of 403 classes. Each class defines a particular business activity. For example, Class 1392 refers to the manufacture of made-up textile articles, and Class 2620 refers to the manufacture of computers and peripheral equipment. This level ensures better clarity in identifying exact business operations.

5. Sub-classes (5-digit codes)

Sub-classes provide the highest level of detail in the NIC Code system. There is a total of 1,304 sub-classes. Each sub-class specifies a very specific activity within a class. For instance, Sub-class 13926 refers to the manufacture of blankets, and Sub-class 01112 refers to the growing of jowar, bajra, and millets. This level ensures the most accurate classification of business activities.

NIC Code List for Services

The NIC Code list for services includes all service-based activities classified under Sections E to U of the NIC?2008 structure. Each section represents a broad area of services, with further classification into divisions, groups, classes, and sub-classes. Here they are:

1. Section E – Water, Waste, and Environmental Services

This section includes activities that manage natural resources and public hygiene.

• Division 36 deals with water collection, treatment, and distribution to consumers.
• Divisions 38 and 39 handle solid waste, hazardous material disposal, and environmental cleanup.

2. Section H – Transportation and Storage

This section covers the movement of goods and people. It includes road, rail, air, and water transport services. It also includes warehousing, cargo handling, and delivery services such as couriers.

3. Section I – Accommodation and Food Services

This section covers hospitality businesses. It includes hotels, motels, resorts, restaurants, canteens, and catering services that offer food and lodging to customers.

4. Section J – Information and Communication

This section deals with data, media, and technology-based services. It includes software publishing, IT services, telecom networks, internet services, and broadcasting agencies.

5. Sections K to S – Business, Administrative, and Personal Services

• Section K – Financial Services

Includes banks, insurance providers, credit agencies, and investment firms.

• Section L – Real Estate

Includes property dealers, brokers, and companies that own or manage land or buildings.

• Section M – Professional, Scientific, and Technical Services

Includes legal firms, accounting offices, architectural consultants, engineering companies, and scientific research institutions.

• Section N – Administrative and Support Services

This category includes employment agencies, event organisers, travel companies, facility management firms, and private security providers. It covers services that support core business operations through manpower, logistics, or safety solutions. For example, Group 802 refers to security system services that install and maintain surveillance or alarm systems. On the other hand,  Group 803 relates to private investigation services that handle background checks, surveillance, and confidential inquiries.

• Sections O to R – Public and Social Services

This section includes public administration, education institutions, hospitals, social care centres, creative arts, and recreational activities.

• Section S – Other Services

This section combines with NGOs, religious organisations, household repair, laundry services, wellness centres, and community groups.

How to Find the Correct NIC Code?

Below is the step-by-step process to find the correct NIC code:

Step 1: Know Your Main Business Activity

Identify the primary work your business performs. Focus on the main product you sell or the service you offer. Ignore side tasks that support your operations but are not your core function. For example, if you run a restaurant that also provides home delivery, your main activity is food service, not logistics. Choosing the right NIC code depends on how clearly you define your primary business.

Step 2: Check the Latest NIC Code List

Visit government platforms like the Udyam registration portal or the MoSPI portal to access the official NIC Code list. These websites publish the most recent version of NIC 2008. It includes detailed classifications for all business types. You can either browse through the structured sections or download the full list in PDF or Excel format. This helps you see how businesses are divided into sections, divisions, groups, classes, and sub-classes.

Step 3: Use the Search Tool on the Udyam Portal

When you can register your business on the Udyam Registration portal, you can use its built-in NIC Code search tool. You need to enter a simple keyword that reflects your business activity. The tool shows a list of NIC codes linked to your keyword. You must read the descriptions carefully and select the one that matches your core service. This tool reduces guesswork and speeds up the process of finding the right code.

Step 4: Select the Correct 5-Digit Code

You should choose the five-digit sub-class code that exactly defines your business activity. Do not select a broader category when a more specific code is available.  A precise code ensures your business falls under the right classification for government records, benefits, and compliance.

Step 5: Take Help from a Professional

If you are confused or unable to match your activity with any code, speak to a Chartered Accountant (CA), a legal expert, or a business consultant. These professionals have experience with business classification and government registrations. They help you select the most accurate code, fill out the correct information, and avoid errors that may delay approval or lead to future complications.

Conclusion

The NIC Code plays a vital role in identifying and classifying business activities in India. It supports smooth registration under Udyam, GST, and MCA. This helps businesses access government schemes, subsidies, and benefits. Choosing the right NIC Code ensures legal accuracy and better policy support. Every entrepreneur must understand their value and select the correct code based on their core business activity for long-term compliance and growth.

FAQ

Q 1. What is the NIC Code, and why is it important?

The NIC Code (National Industrial Classification Code) is a unique number that identifies the type of activity a business performs. It is required for official registrations like GST, Udyam, and company incorporation. It helps the government classify industries, offer relevant benefits, and maintain accurate economic data.

Q 2. Where can I find the correct NIC Code for my business?

You can find your NIC Code on the Udyam registration portal, the MoSPI website, or other government-supported platforms. Use the search feature to enter your business activity and choose the most relevant 5-digit code from the list.

Q 3. What If You Enter the Wrong NIC Code?

Choosing the wrong NIC Code can cause registration delays, rejection of applications, or disqualification from government schemes. It may also lead to compliance issues during inspections. To avoid problems, always verify your code or consult a professional before submitting it.