MSMEs proceed to indicate resilience amidst moderating optimism
Mumbai, October 27, 2025: The Small Industries Growth Financial institution of India (SIDBI) has launched the fourth version of its “MSME Outlook Survey,” a quarterly publication that gives key insights into the enterprise sentiment amongst Indian Micro, Small, and Medium Enterprises (MSMEs). This complete pan-India survey captures the views of MSMEs working throughout manufacturing, providers, and buying and selling sectors and goals to bridge vital knowledge gaps by way of a lead in addition to a lag indicator — the MSME Enterprise Expectations Index (M-BEI) and MSME Enterprise Situations Index (M-BCI).
These indices, which vary from 0 to 100, mirror MSME sentiment, with values above 50 indicating a optimistic outlook. The M-BCI and M-BEI are derived from six key parameters: gross sales, revenue margins, availability of expert labour, entry to working capital and general finance, and the general enterprise scenario. The survey additionally covers capability utilisation, capital expenditure, curiosity price developments, and ease of doing enterprise. The present spherical relies on inputs from a consultant pattern of 1,200 MSMEs throughout completely different areas and industries.
The composite M-BCI for July-September 2025 quarter declined to 61.64 from 63.75 within the earlier quarter, indicating a modest dip in confidence. Sector-wise, manufacturing and providers maintained regular optimism, whereas buying and selling confirmed extra volatility.
The composite M-BEI initiatives a optimistic outlook, with the composite index anticipated to rise to 62.26 within the subsequent quarter and additional to 66.57 within the quarter one-year forward (July-September, 2026). This displays MSMEs’ anticipation of improved market situations, pushed by stronger home demand and supportive insurance policies such because the reduce in GST on a variety of services and products. The providers sector, specifically, reveals sturdy expectations for future progress.
Gross sales sentiment softened modestly in Jul-Sep 2025, with 50% of buying and selling and 47% of producing MSMEs noting optimistic progress, down from the earlier quarter. The providers sector maintained its earlier momentum. Trying forward, income expectations stay upbeat, bolstered by the festive season. Though optimistic progress in export gross sales dipped to 43%, exporters anticipate a powerful rebound, with 56% anticipating wholesome progress subsequent yr.
Price pressures eased in manufacturing and buying and selling, aligning with low wholesale inflation; the providers sector noticed secure enter prices. Nonetheless, many MSMEs anticipate price challenges to persist.
Most companies proceed to indicate resilience, with the bulk experiencing secure revenue margins, and almost one in 5 even reporting enhancements. Whereas a small portion (15%-20%) noticed some stress on income, general optimism stays excessive. Trying forward, expectations for the subsequent yr are vibrant, particularly within the manufacturing and providers sectors, the place optimistic momentum is anticipated to proceed.
There are indicators of easing of curiosity burden of MSMEs, significantly in manufacturing, the place the share of these reporting enhance in price of finance / rates of interest fell from 41% to 33%. Nevertheless, expectations of elevated finance prices persist throughout sectors, reflecting cautious sentiment about future rate of interest developments.
MSME credit score availability reveals combined outcomes. In manufacturing, extra companies (92%, up from 88%) say credit score is offered, however many discover it insufficient. In providers, extra MSMEs (19%, up from 13%) report issue in getting finance. Manufacturing MSMEs stay looking forward to higher credit score entry attributable to supportive insurance policies.
There’s an enchancment in expert labour availability, with optimism rising considerably throughout all sectors from the primary spherical to the newest spherical of the survey. Nevertheless, the optimistic responses for the longer term quarters fall again to degree that of the earlier quarter, indicating a constant inadequacy of expert labours.
MSME capability utilisation is steadily enhancing. In manufacturing, companies with above-normal utilisation elevated from 21% to 25% and is anticipated to succeed in 36% subsequent yr. Companies present an identical rise, with expectations going from 20% to 30%. Many companies are including capability: 42% in manufacturing and 35% in providers this quarter, with much more planning to take action subsequent yr. This reveals confidence in future demand.
Respondents within the Companies and Buying and selling sector anticipate a greater debtor realization interval sooner or later. The optimistic responses indicating the outlook, although higher than the present quarter, stays under that of the Apr-Jun 25 interval, indicating a persistent problem in debtor realization in manufacturing sector. The share of respondents indicating enhancements within the debtor realization timelines declined as in comparison with the earlier spherical for all three sectors. Nonetheless, future expectations are optimistic, with extra companies anticipating improved timelines.
Ease of Doing Enterprise (EoDB) indicators present enchancment throughout parameters akin to permits, electrical energy provide, compliance, and general enterprise setting. Optimism within the common outlook in the direction of EoDB is excessive in one-year-ahead expectations throughout sectors with over 60% of respondents in every sector anticipating additional enhancements.
The survey has additionally assessed the High quality Management Orders (QCO) influence throughout MSME sectors. The findings counsel that the QCO framework has an influence on a sure part of MSMEs significantly in buying and selling and manufacturing by way of prices and time taken for such compliances. The survey additionally highlights that there stays a spot in consciousness in regards to the QCO norms and interventions are obligatory on this regard.
The report is offered at – https://www.sidbi.in/en/msme-outlook-survey
About Small Industries Growth Financial institution of India (SIDBI):
Since its formation in 1990, SIDBI has been touching the lives of residents throughout numerous strata of society by way of its built-in, modern and inclusive strategy for all spherical growth of MSMEs. SIDBI has immediately or not directly by way of numerous credit score and developmental measures impacted the myriad Micro, Small and Medium Enterprises (MSMEs) within the nation, whether or not they’re conventional, home small entrepreneurs, bottom-of-the-pyramid entrepreneurs, or high-end knowledge-based entrepreneurs.
For extra data, please go to: https://www.sidbi.in/
