New Delhi, Feb 24 (IANS) A year-on-year analysis of the MSME Business Confidence Index (M-BCI) for the October-December 2025 quarter, at both composite and sectoral levels, indicates an improvement over the last one-year period despite the global risks as the domestic macroeconomic environment has offered strong support, according to a SIDBI outlook survey released on Tuesday.
Availability of working capital finance and overall finance recorded the strongest improvement; sales and overall business scenario also improved, indicating resilient demand and a stable operating outlook. The year-on-year improvement in sentiments was driven by a favourable domestic macroeconomic environment despite the external headwinds, the survey states.
It shows that MSME exporters have shown encouraging interest in policy support measures including RBI Trade Relief measures and Credit Guarantee Scheme for Exporters (CGSE) with 43 per cent of respondents plan to avail RBI’s Trade Relief, 46 per cent of respondents intend to adopt CGSE while around 37 per cent of respondents expect to use both options.
The Small Industries Development Bank of India (SIDBI) released the fifth edition of its “MSME Outlook Survey,” a quarterly publication that provides key insights into the current business sentiment and future outlook among India’s MSMEs.
It further states that the new Labour Codes offer MSMEs an opportunity to strengthen their operational frameworks and advance formalisation. While 34-36 per cent of surveyed firms anticipate a short-term rise in compliance costs, many also identified areas where targeted support could ease the transition -- particularly clearer guidance on specific provisions (16–21 per cent) and stronger training and awareness initiatives (17–19 per cent). Focused capacity-building will be essential for smooth and successful adoption, the survey states.
MSME confidence also remains sequentially stable as manufacturing gains momentum with an optimistic outlook across sectors with the composite M-BCI for October-December 2025 quarter estimated at 60.8. Sector-wise, manufacturing witnessed improvement in the sentiment with M-BCI rising to 64.1 in the quarter from 62.9 in the previous quarter while trading and services witnessed moderation.
The composite M-BEI projects a positive outlook, with the composite index expected to rise to 63.7 in the next quarter and further to 65.0 in the quarter one-year ahead (October-December 2026) signaling an optimistic business outlook in the near term.
The manufacturing sector witnessed stronger sales sentiment and higher expectations for future sales growth. While sales sentiments don’t reveal any material improvement in the current quarter (Oct-Dec 2025) compared to the previous quarter in the services and trading sectors, respondents remain fairly optimistic about sales prospects in the forthcoming periods, the survey observes.
In the current quarter, optimism about availability of working capital finance rose significantly, with 46 per cent of manufacturing respondents expressing positive sentiment; an increase from 35 per cent in the previous quarter. Similarly, optimism regarding overall finance availability in that sector improved to 47 per cent.
In case of services, sentiments on finance indicators improved marginally between the quarters; for trading enterprises, however, sentiment around working capital finance moderated, even as sentiments regarding overall finance strengthened significantly, the survey added.
--IANS
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