Mumbai: The Small Industries Development Bank of India (SIDBI) has released its latest SIDBI MSME Outlook Survey for Q1 FY2026 (April–June 2025), showcasing a notable surge in confidence and business activity among Indian Micro, Small, and Medium Enterprises (MSMEs).
The SIDBI MSME Outlook Survey, now in its third edition, is a comprehensive quarterly assessment of MSME sentiment across the manufacturing, services, and trading sectors.
The Composite MSME Business Conditions Index (M-BCI) climbed to 63.75, up from 60.82 in the previous quarter, while the MSME Business Expectations Index (M-BEI) stood at 62.19 for the next quarter and is projected to rise to 67.88 for the corresponding quarter in FY2027.
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Both indices – scored on a scale of 0 to 100 – indicate sustained optimism when above the 50-point threshold.
Derived from key parameters such as sales performance, profitability, labor availability, access to finance, and the overall business environment, the indices reflect broad-based recovery and forward momentum for MSMEs nationwide.
The SIDBI MSME Outlook Survey, conducted among 1,200 MSMEs, also evaluates capacity utilization, capital expenditure trends, interest rate perceptions, and ease of doing business.
Key findings from the SIDBI MSME Outlook Survey include:
- Sales Growth: Over 50% of manufacturing and trading MSMEs reported sales growth during Q1FY26. In services, 42% saw growth while 48% maintained stable sales.
- Profitability: Despite rising input costs, MSMEs across all sectors posted stronger net margins. Future profitability remains promising, particularly in services and trading.
- Skilled Labor Availability: Nearly 25% of respondents reported improvements, with expectations of continued progress in the coming year.
- Capacity Utilization: Around one-fifth of businesses reported above-normal utilization, with 29% projecting further increases over the next 12 months.
- Finance Access: 88% of MSMEs confirmed better access to finance, a notable jump from 79% in the previous round. The trend was most visible in the trading sector.
- Interest Rates: MSMEs reported a moderation in the cost of borrowing, in line with the RBI’s 100 basis point repo rate cut since February 2025.
- Ease of Doing Business (EoDB): Half of the surveyed enterprises reported an improved EoDB experience in Q1FY26, with 60% anticipating further enhancements—particularly in compliance and return filings.
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The full report can be accessed at SIDBI MSME Outlook Survey.
With improving macroeconomic conditions and policy support, the SIDBI MSME Outlook Survey indicates a resilient and forward-looking MSME sector, well-positioned to fuel India’s next wave of economic growth.
