India’s micro, small and medium enterprises (MSMEs) reported stronger business confidence in July-September 2026, with manufacturing emerging as the most optimistic sector even as rising input costs continued to put pressure on businesses, according to the Small Industries Development Bank of India (SIDBI).The MSME Business Confidence Index (M-BCI) climbed to 60.4 in the July-September quarter, up from 59.3 in the preceding quarter, according to the eighth round of SIDBI’s MSME Outlook Survey. The improvement points to a rise in business sentiment, while confidence across manufacturing, trading and services remained above the neutral mark of 50.“The overall confidence remains well above the neutral level of 50 across all three sectors, continuing to point to an underlying resilience in the Indian MSME ecosystem,” it said.The survey found that nearly half of the enterprises covered reported better business conditions during the quarter. Around 49% said conditions had improved compared with the previous quarter, while 33% reported no change. The remaining 18% said business conditions had weakened.The M-BCI measures the current sentiment, health and optimism of micro, small and medium enterprises. The survey’s forward-looking indicator also pointed to continued confidence, with the MSME Business Expectations Index (M-BEI) projected at 61.7 for October-December 2026 and 62.2 for July-September 2027.“Future outlook remains positive, with the M-BEI at 61.7 for OctDec 2026 and 62.2 for Jul-Sep 2027, signalling sustained optimism about business prospects,” it said, as cited by ANI.
Manufacturing firms report stronger sales sentiment
Manufacturing recorded the highest business confidence among the three sectors, with its M-BCI increasing to 61.0 in July-September 2026 from 59.5 in the previous quarter.Sales trends also showed some improvement.Around 43% of manufacturing enterprises reported positive sales growth during the quarter, while the proportion of pessimistic responses declined to 27%.The sector’s expectations for the coming quarters were stronger still. Its Business Expectations Index stood at 63.3 for October-December 2026 and is expected to reach 64.8 for July-September 2027.“Future expectations remain significantly upbeat, with the Manufacturing MSME Business Expectations Index (M-BEI) at 63.3 for Oct-Dec 2026 and rising to 64.8 for JulSep 2027, signalling confidence in improved business conditions ahead.”
Services confidence improves, trading and services outlook stays positive
Business confidence in the services sector also strengthened during the July-September quarter. Its M-BCI rose to 61.3 from 60.4 in the previous quarter.The outlook for non-manufacturing enterprises remained positive, with the expected index for trading at 61.1 and services at 61.0 for October-December 2026.“Future sentiment in non-manufacturing remains positive, with expected indices of 61.1 (Trading) and 61.0 (Services) for Oct-Dec 2026; by Jul-Sep 2027.”For July-September 2027, the trading index is expected to increase to 60.9, while the services expectation is projected to moderate marginally to 61.1, the report said.