India’s MSME sector is displaying early signs of recovery, with around 80% of firms noting improved performance recently. An impressive 86% of these businesses anticipate growth in 2026, as per a report by SME-focused NBFC NeoGrowth. The positive outlook is fueled by robust festive sales, enhanced cash flow, and benefits from GST 2.0.
The study, encompassing over 2,000 MSMEs across 25 cities, reveals that over 71% of these enterprises are planning to expand their operations or launch new outlets. Additionally, 30% intend to introduce new products or brands, indicating a shift towards medium-term confidence from short-term recovery. Notably, optimism is particularly high in consumer-facing sectors, such as beauty, wellness, automobile, and food & beverage.
Arun Nayyar, the Managing Director and CEO of NeoGrowth, highlighted the encouraging trends observed in the MSME sector. He emphasized the significance of festive demand, increased digital payment adoption, and the advantages of GST 2.0 in driving business momentum. The study underscores the measured confidence among MSMEs, evident in their growth strategies and expansion plans.
Expectations from Budget 2026 among MSMEs primarily revolve around initiatives that can enhance operational efficiency and continuity. Key priorities include timely access to working capital, streamlined access to existing government schemes, and simplified GST and compliance processes. The report indicates that a significant portion of MSMEs seek faster and improved access to government schemes to support their growth objectives.
