SIDBI Reports Strong Manufacturing Sentiment Among MSMEs Despite Increasing Input Costs
India’s micro, small, and medium enterprises (MSMEs) have reported an increase in business confidence for the July-September 2026 quarter, according to the Small Industries Development Bank of India (SIDBI). The MSME Business Confidence Index (M-BCI) rose to 60.4, up from 59.3 in the previous quarter. Despite ongoing challenges from rising input costs, confidence across manufacturing, trading, and services sectors remained above the neutral mark of 50.
The survey indicated that nearly half of the enterprises surveyed experienced improved business conditions. Specifically, 49% reported better conditions compared to the previous quarter, while 33% noted no change. Only 18% of respondents indicated a decline in business conditions. The M-BCI reflects the current sentiment and health of MSMEs, and the forward-looking MSME Business Expectations Index (M-BEI) is projected at 61.7 for October-December 2026 and 62.2 for July-September 2027.
Manufacturing firms report stronger sales sentiment
The manufacturing sector exhibited the highest level of business confidence, with its M-BCI increasing to 61.0 from 59.5 in the previous quarter. Sales trends in this sector also showed improvement, as 43% of manufacturing enterprises reported positive sales growth, while pessimistic responses decreased to 27%. The Business Expectations Index for manufacturing is projected to be 63.3 for October-December 2026 and is expected to rise to 64.8 for July-September 2027.
Future expectations for the manufacturing sector remain optimistic, with the M-BEI indicating confidence in improved business conditions ahead.
Services confidence improves, trading and services outlook stays positive
Business confidence in the services sector also strengthened, with its M-BCI rising to 61.3 from 60.4 in the previous quarter. The outlook for non-manufacturing enterprises remains positive, with the expected index for trading at 61.1 and services at 61.0 for October-December 2026.
For July-September 2027, the trading index is expected to increase to 60.9, while the services expectation is projected to moderate slightly to 61.1, according to the report.
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