The revised Schedule M under India’s Drugs and Cosmetics Rules, 1945 has emerged as one of the most significant regulatory reforms in the pharmaceutical manufacturing landscape in recent years. It upgrades the framework for good manufacturing practices (GMP) by emphasizing pharmaceutical quality systems, quality risk management, product quality review, validation, computerized record control, and enhanced accountability in premises, plant, and equipment. This review examines the scenario of Indian pharmaceutical micro, small, and medium enterprises (MSMEs) in the context of the revised Schedule M, with a focus on the regulatory shift, compliance burden, preparedness, and policy implications. Using publicly reported secondary data, the paper performs descriptive statistical analysis, proportion testing, confidence interval estimation, and state-level comparison to quantify the readiness gap. The results indicate that 1,700 of 6,500 non-GMP MSME drug manufacturers had submitted upgrade plans, equivalent to 26.15% preparedness, while 73.85% remained outside the reported transition pipeline. The 95% confidence interval for readiness is 25.08%–27.23%, indicating a stable but low compliance rate. Gujarat’s reported gap-analysis submission rate of 98.77% stands far above the national MSME average, underscoring sharp interstate variation. The review concludes that while revised Schedule M can strengthen product quality, export readiness, and patient safety, its success among MSMEs depends on phased implementation, technical handholding, affordable financing, and cluster-based infrastructure support.