SIDBI Releases MSME Outlook Survey for April–June 2025: Strong Confidence and Optimism Across Sectors

The Small Industries Development Bank of India (SIDBI) has released its third quarterly MSME Outlook Survey, providing key insights into the current state and future expectations of India’s Micro, Small, and Medium Enterprises (MSMEs). The April–June 2025 survey indicates strong and sustained business confidence across manufacturing, trading, and services sectors.

At the heart of the report are two core indices: the MSME Business Confidence Index (M-BCI) and the MSME Business Expectations Index (M-BEI). Ranging from 0 to 100, a score above 50 signals positive sentiment. For Q1FY26, the M-BCI has risen to 63.75, up from 60.82 in the previous quarter, signaling an increasingly favorable business environment.

The forward-looking M-BEI for the next quarter stands at 62.19, and climbs to 67.88 for the same period next year, reflecting widespread optimism. The trading and services sectors show the highest expectations, with both crossing the 68 mark for Q1FY27.

Sales growth remains robust, with over 50% of MSMEs in manufacturing and trading reporting an uptick. The services sector also fared well, with 42% recording growth and 48% reporting stable performance. Year-on-year, MSMEs across all verticals indicate steady expansion, with 60% anticipating further sales growth.

Profit margins showed resilience despite rising input costs. Notably, MSMEs in the trading and services sectors expect increased costs in the near term but remain confident in sustaining profitability.

Skilled labour availability saw encouraging progress—around 25% of MSMEs reported improvements, a trend expected to strengthen through FY26. Additionally, capacity utilisation improved significantly, with 20% of businesses operating above normal capacity. Nearly 29% project further increases over the next year.

Access to finance has become easier, with 88% of MSMEs confirming improved availability—a notable rise from 79% last quarter. This development, especially pronounced in the trading sector, is backed by greater sales and demand for credit. Cost of finance is also becoming less burdensome, as recent RBI rate cuts totalling 100 basis points have helped drive down lending rates.

SIDBI also reported gains in Ease of Doing Business (EoDB). About 50% of MSMEs reported a better EoDB experience in Q1FY26, particularly in compliance and return filings. Over 60% expect further improvements in the coming year.

SIDBI’s comprehensive survey, covering 1,200 MSMEs nationwide, aims to bridge key data gaps in India’s MSME landscape. By combining backwards-looking and forward-looking indicators, the M-BCI and M-BEI offer vital insight into business confidence, operational trends, and macro-level expectations.

With growing access to capital, improving ease of business, and rising optimism, India’s MSME sector appears well-positioned for sustained growth through FY26 and beyond.

Access the full report at: https://www.sidbi.in/en/msme-outlook-survey