Business confidence among India's micro, small and medium enterprises (MSMEs) declined for the fourth consecutive quarter in April-June 2026, as cost pressures and demand concerns weighed on sentiment, according to the latest MSME Outlook Survey by the Small Industries Development Bank of India (SIDBI). The MSME Business Confidence Index (M-BCI) moderated to 59.3 in April-June 2026 from 59.8 in the previous quarter. As reported by Zee News, this represents the lowest confidence level in four years, with the index showing a steady decline from 63.8 in April-June 2025 to the current levels. The survey indicates 'cautious optimism amid cost pressure and demand concerns', however, the index continued to remain above the expansion threshold across manufacturing, trading and services, indicating resilience among MSMEs.
According to the SIDBI survey, the latest reading indicated 'cautious optimism amid cost pressure and demand concerns', however, the index continued to remain above the expansion threshold across manufacturing, trading and services, indicating resilience among MSMEs. The index has shown a consistent downward trajectory, declining from 61.6 in July-September 2025 to 60.8 in October-December 2025 and 59.8 in January-March 2026 before reaching the current level of 59.3 in April-June 2026.
The survey findings indicate that while overall confidence has declined, MSMEs across different sectors continue to show resilience. The index maintained its position above the expansion threshold across manufacturing, trading and services sectors, suggesting that despite current challenges, these key MSME segments are still experiencing positive business conditions. This resilience pattern has been consistent throughout the recent quarters of declining confidence levels.
The declining MSME confidence reflects broader challenges facing Indian businesses, as evidenced by recent corporate earnings. Jyoti CNC Automation, a Gujarat-based machine tools manufacturer, reported a 20.2% year-on-year decline in net profit to ₹57 crore for Q1 FY27, despite 24% revenue growth to ₹508.5 crore. The company's EBITDA margin contracted sharply to 21.4% from 24.4% in the previous year, with finance costs rising significantly. This performance follows a weaker March quarter where the company had also faced margin pressure, highlighting the ongoing challenges facing manufacturing MSMEs in the current economic environment.
