India’s MSME manufacturing sector, as per the PHD Chamber of Commerce and Industry (PHDCCI), is displaying resilience and sustained growth. The PHDCCI’s SME Market Sentiment Index (SMESI) fourth round report for January–March 2026 indicates a slight moderation in growth pace due to global challenges. The SME Business Activity Index (SME-BAI) for the March quarter stood at 56.5, showing continued expansion but slightly lower than the previous quarter.
The SME Business Outlook Index (SME-BOI) for April–June 2026 is at 58.7, reflecting a positive yet slightly softer outlook compared to the earlier period. Business activity growth is fueled by steady new orders and production levels, with around 37% of surveyed firms reporting an increase in new orders. Employment levels and supplier delivery timelines have remained stable, indicating a cautious approach by businesses amid changing conditions.
Looking forward to the April–June quarter, the outlook remains optimistic, with 37% of firms expecting further business activity expansion. Nearly half of the respondents foresee unchanged business conditions. Investment sentiment is positive, with 47% of firms planning to boost capital expenditure driven by demand prospects. However, hiring trends are measured, reflecting a strategy to maintain operational efficiency amidst external uncertainties.
