SIDBI Survey Shows MSME Business Confidence Improves Despite Rising Input Costs

Business confidence among India’s micro, small, and medium enterprises (MSMEs) has improved heading into the coming quarters, even as businesses continue to face challenges related to rising input costs. This trend was highlighted in the latest survey report released by the Small Industries Development Bank of India (SIDBI).

The SIDBI MSME Outlook Survey Round 8, covering the July-September period, pointed to growing optimism regarding future business prospects. According to the report, the overall confidence index remained well above the neutral level of 50 across manufacturing, trading, and services sectors, reflecting fundamental resilience within the Indian MSME ecosystem.

The MSME Business Confidence Index (M-BCI) rose to 60.4 during the July-September quarter, compared to 59.3 in the previous quarter. Data from the survey showed that approximately 49% of enterprises reported improved business conditions, while 33% indicated status quo, and 18% experienced softer business conditions relative to the preceding quarter.

Looking ahead, the survey's Business Expectations Index (M-BEI) stood at 61.7 for the October-December period and is projected at 62.2 for the July-September period next year, pointing to sustained positive sentiment.

At the sectoral level, business sentiment was highest in manufacturing, followed closely by trading and services. In the manufacturing sector, the M-BCI climbed to 61.0 from 59.5 in the previous quarter. Around 43% of manufacturing enterprises reported positive sales growth, while pessimistic responses declined to 27%, indicating a moderate lift in sales performance.

The outlook for manufacturing remains upbeat, with the sector's Business Expectations Index recorded at 63.3 for October-December and expected to rise to 64.8 for July-September next year. Meanwhile, the Services MSME Business Confidence Index also registered an increase, moving to 61.3 from 60.4 in the prior quarter. Non-manufacturing future sentiment also remained positive, with expected indices of 61.1 for trading and 61.0 for services in the upcoming quarters.

"The steady rise in the MSME Business Confidence Index, despite ongoing pressures from input costs, highlights the structural resilience of India's small business sector. Manufacturing continues to lead this momentum, backed by healthier sales performance and positive medium-term expectations. For entrepreneurs and small business operators, maintaining disciplined cost management while scaling operations will be critical to sustaining this growth trajectory as market demand evolves." — Dr. Shishir Gupta, Founder & CEO, StartupLanes