MSME sector resilient, says SIDBI

New Delhi: The MSME sector has recorded an improvement in business sentiment despite global risks, supported by a strong domestic macroeconomic environment, according to the latest outlook survey released by Small Industries Development Bank of India (SIDBI).

A year-on-year analysis of the MSME Business Confidence Index (M-BCI) for the October-December 2025 quarter shows improvement at both composite and sectoral levels. Availability of working capital finance and overall finance registered the strongest gains, while sales and the overall business scenario also improved, reflecting resilient demand and a stable operating outlook.

The survey indicates rising interest among MSME exporters in policy support measures. Around 43 per cent of respondents plan to avail the Trade Relief measures of the Reserve Bank of India, while 46 per cent intend to adopt the Credit Guarantee Scheme for Exporters (CGSE). About 37 per cent expect to use both options.

SIDBI released the fifth edition of its quarterly “MSME Outlook Survey,” which captures current business sentiment and future expectations across manufacturing, trading and services sectors. It also highlights opportunities arising from the new Labour Codes, which could help MSMEs strengthen operational frameworks and advance formalisation. While 34–36 per cent of firms expect a short-term rise in compliance costs, respondents stressed the need for clearer guidance on provisions and enhanced training and awareness to ease adoption.

Sequentially, MSME confidence remained stable, led by manufacturing. The composite M-BCI for the October-December 2025 quarter stood at 60.8. Manufacturing sentiment improved to 64.1 from 62.9 in the previous quarter, while trading and services saw moderation.

Looking ahead, the composite MSME Business Expectations Index (M-BEI) projects continued optimism, with the index expected to rise to 63.7 in the next quarter and 65.0 by October-December 2026.