ni-msme was originally set up as Central Industrial Extension Training Institute (CIETI) in New Delhi in 1960 as a Department under the Ministry of Industry and Commerce, Government of India. It was decided to keep it free from the tardy and impeding administrative controls and procedures, so that the Institute can play a pivotal role in the promotion of small enterprise. Therefore the Institute was shifted to Hyderabad in 1962, and was renamed as Small Industry Extension Training (SIET) Institute.

SIET, as it was fondly known for over two decades later, is managed by Governing Council, appointed by the Government of India. The Founder-Chairman of SIET is Dr P.C. Alexander, the then Development Commissioner (Small Scale Industries).

Centres of Excellence 
SIET was conferred the status of national institute by the Government of India with the charter of assisting in the promotion of Small Enterprises mainly by creating a pro-business environment. In 1984, the UNIDO had recognised SIET as an institute of meritorious performance under its Centres of Excellence Scheme subsequently, it was also accorded the national status in the same year and SIET Institute became nisiet. Since then the institute has come a long way, carving a place of distinction for itself in the domain of entrepreneurship promotion, achieving recognition both at the national level and in the international arena. To cope with the pressure of globalisation, the Government of India has enacted the MSMED Bill in the Parliament, which became effective from 2nd October 2006. Accordingly, the Institute, in order to reflect the expanded focus of its objectives with name was rechristened as ni-msme from 11th April 2007 and re-desined its structure and organisation. It is an organisation of the Ministry of Micro, Small and Medium Enterprises (M/o MSME) (formerly Ministry of SSI & ARI), Government of India.

The ni-msme (formerly as SIET) was registered at Hyderabad in Andhra Pradesh under Public Societies Registration Act I of 1350 Fasli with effective from 1st July 1962.

Administration of the society
The affairs of the Society are managed, administered, directed and controlled through Governing Council constituted by the Government of India as per Rule 22(a & b) of Rules and Regulations of the Society. The Society, as provided under Rule 3 of Rules and Regulations, was constituted by the Government of India.

The Secretary to the Government of India, The Ministry of MSME is the President of the Society and Chairman of the Governing Council. Currently, Shri. Bidyut Bihari Swain, IAS is the Secretary to the Government of India, Ministry. of Micro, Small and Medium Enterprises At the helm Ms. Mercy Epao, is the Joint Secretary of Government of India, Ministry. of Micro, Small and Medium Enterprises and Dr. S. Glory Swarupa is the Director General of the Institute.