Small businesses remain optimistic with manufacturing gains and easier finance, finds latest SIDBI survey – CNBC TV18

The Small Industries Development Bank of India (SIDBI) has released the fifth edition of its MSME Outlook Survey for October-December 2025, indicating stable business confidence despite external risks. The composite MSME Business Conditions Index (M-BCI) stood at 60.8 in Q3 FY26, marginally lower than 61.6 in the previous quarter. An index reading above 50 signals an expansionary outlook.

Sector-wise, manufacturing sentiment strengthened, with the M-BCI rising to 64.1 from 62.9 in the preceding quarter. However, trading and services recorded moderation. The composite MSME Business Expectations Index (M-BEI) projects improvement, with the index expected to increase to 63.7 next quarter and further to 65.0 in October–December 2026.

Manufacturing enterprises reported stronger sales sentiment and higher expectations for future growth. While services and trading showed limited improvement in sales sentiment during the quarter, respondents remained optimistic about forthcoming periods.

Access to finance reflected an improving trend. Optimism regarding working capital finance among manufacturing units rose to 46% from 35% in the previous quarter. Sentiment on overall finance availability in the sector also improved to 47%. In services, finance-related sentiment improved marginally, whereas trading enterprises saw moderation in working capital finance sentiment but stronger overall finance confidence.

Concerns over profit margins emerged in services and trading, with Net Response declining or turning negative sequentially. Nonetheless, respondents expect profitability to improve over the next year.

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On a year-on-year basis, the M-BCI improved across composite and sectoral levels, supported by a favourable domestic macroeconomic environment and credit policies. Among exporters, 43% plan to avail RBI trade relief measures, 46% intend to adopt the Credit Guarantee Scheme for Exporters, and nearly 37% expect to use both options.