SIDBI Unveils Seventh Round of MSME Outlook Survey for April–June 2026

MSMEs Remain Resilient Despite West Asia Conflict; Business Confidence Holds Firm, SIDBI Survey Finds

Mumbai, August 9: India’s Micro, Small and Medium Enterprises (MSMEs) have continued to remain resilient despite global uncertainties, including the conflict in West Asia, with business confidence staying firmly in positive territory and enterprises remaining optimistic about the year ahead, according to the latest MSME Outlook Survey April–June 2026 released by the Small Industries Development Bank of India (SIDBI).

The survey shows that while MSMEs continue to face challenges such as cost pressures, demand concerns and shortage of skilled labour, the overall mood across the sector remains positive. Businesses have reported stable sales, steady profit margins and continued access to finance, while expectations for the coming quarters remain encouraging.

Reflecting this resilience, the MSME Business Confidence Index (M-BCI) stood at 59.3 during the April-June 2026 quarter, compared with 59.8 in the previous quarter. The index continues to remain comfortably above the 50-mark, indicating that business confidence remains in expansionary territory despite the uncertain global environment.

The survey also points to sustained optimism about future business conditions. The MSME Business Expectations Index (M-BEI) stood at 60.1 for the July-September 2026 quarter and is expected to improve further to 61.2 for April-June 2027, indicating that MSMEs remain confident about business prospects over the coming year.

Sales sentiment remained broadly positive across manufacturing, trading and services during the April-June 2026 quarter. While manufacturing and services enterprises became slightly more cautious than in the previous survey round, trading enterprises performed better, with fewer businesses reporting a pessimistic outlook.

Profitability also remained largely stable across sectors. Most enterprises reported no significant change in profit margins during the quarter. At the same time, 21% of manufacturing enterprises, 20% of trading enterprises and 22% of services enterprises reported an improvement in net profit margins, even as 20% to 30% of businesses across sectors reported a decline, indicating that margin pressures continue for some MSMEs.

The survey identifies skilled labour availability as one of the key challenges facing MSMEs. Around 20% of respondents in the manufacturing and services sectors reported a deterioration in the availability of skilled workers. However, most enterprises said labour availability remained stable or improved during the quarter, although a section expects skill shortages to continue.

Access to finance remained broadly stable across sectors. Most enterprises reported steady availability of working capital finance during the quarter. While manufacturing enterprises expect some moderation going forward, businesses in the services and trading sectors expect working capital availability to improve. A similar trend was observed in the availability of overall finance. While manufacturing and services enterprises expect some moderation, trading enterprises anticipate a significant improvement over the next year.

Overall, the survey shows that business sentiment among Indian MSMEs continues to remain positive and broadly unchanged from the previous quarter. In the services sector, although the share of enterprises expecting better business conditions one year ahead moderated to 32% from the current level of 44%, the overall outlook continues to remain positive.

The MSME Outlook Survey is SIDBI’s quarterly assessment of business sentiment among MSMEs. It tracks both current business conditions through the MSME Business Confidence Index (M-BCI) and future expectations through the MSME Business Expectations Index (M-BEI). Both indices are measured on a scale of 0 to 100, with a score above 50 indicating a positive or expansionary outlook.

(Disclaimer: The information provided here is investment advice only. Investing in the markets is subject to risks and please consult your advisor before investing.)

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