MSMEs remain resilient despite West Asia crisis: SIDBI

India’s micro, small and medium enterprises (MSMEs) have remained resilient despite global uncertainties, including the conflict in West Asia, with business confidence staying firmly in positive territory, according to the latest MSME Outlook Survey by the Small Industries Development Bank of India (SIDBI).According to the information,the MSME Business Confidence Index (M-BCI) stood at 59.3 in the April-June 2026 quarter, compared with 59.8 in the previous quarter. Despite the marginal decline, the index remained above 50, indicating continued expansionary sentiment
The outlook for the coming quarters also remained positive. The MSME Business Expectations Index (M-BEI) stood at 60.1 for July-September 2026 and is projected to rise to 61.2 for April-June 2027.
Sales Stable, But Costs and Labour Remain Concerns
Sales sentiment remained positive across manufacturing, trading and services. Trading enterprises reported improved sentiment, while manufacturing and services businesses were somewhat more cautious than in the previous survey.Profit margins were broadly stable, although pressures remained. Around 21% of manufacturing, 20% of trading and 22% of services enterprises reported improved net profit margins, while 20-30% of businesses across the three sectors reported a decline.
The survey also identified skilled labour as a continuing challenge, with around 20% of manufacturing and services respondents reporting deterioration in the availability of skilled workers.Access to finance remained broadly stable, with most enterprises reporting steady availability of working-capital finance. However, manufacturing firms expect some moderation ahead, while trading and services enterprises anticipate improvement.
Economists said the resilience in MSME sentiment suggests that strong domestic demand and relatively stable financing conditions are helping smaller businesses absorb external shocks. However, prolonged geopolitical tensions, higher energy and input costs, supply-chain disruptions and skill shortages could put pressure on margins and investment if they persist.Overall, the survey points to cautious optimism among MSMEs, with businesses remaining positive about the year ahead despite the uncertain global environment.

(Business Correspondent)