MSME Sector Exhibits Resilience Despite Global Challenges; Policy Support Essential for Continued Growth
Synopsis
India’s MSME manufacturing sector remains strong amid global hurdles. However, to sustain this growth, the PHDCCI emphasizes the need for timely policy support and a favorable external environment. Discover key insights from the latest SME Market Sentiment Index.
Key Takeaways
MSME sector shows ongoing resilience amid global challenges.
Policy support is essential for sustaining growth.
SME Business Activity Index at 56.5 , indicating expansion.
Investment sentiment remains positive, with 47% of firms planning to increase capital expenditure.
Hiring trends reflect a cautious approach to workforce expansion.
New Delhi, April 20 (NationPress) The MSME manufacturing sector in India demonstrates remarkable resilience with ongoing expansion, yet sustaining this growth trajectory hinges on prompt policy interventions and a stable international landscape, according to the PHD Chamber of Commerce and Industry (PHDCCI) on Monday.
The PHDCCI has unveiled its fourth iteration of the SME Market Sentiment Index (SMESI), which evaluates the performance of the manufacturing MSME sector for the period of January to March 2026 and anticipates the outlook for the following quarter.
The report reveals that while growth remains robust, the pace has slightly eased due to emerging global challenges.
As per the survey, the SME Business Activity Index (SME-BAI) registered at 56.5 in the March quarter, indicating ongoing expansion, though a decrease from the 58.9 reported in the previous quarter.
In a similar vein, the SME Business Outlook Index (SME-BOI) recorded 58.7 for April to June 2026, reflecting a positive yet somewhat tempered outlook compared to the prior reading of 60.7.
The report emphasizes that the uptick in business activity is fueled by consistent new orders and production levels.
Approximately 37 percent of the firms surveyed indicated an increase in new orders, which bolstered higher output during the quarter.
Meanwhile, employment rates and supplier delivery schedules remained relatively stable, reflecting a cautious yet balanced approach among businesses in light of fluctuating conditions.
Looking forward to the April to June quarter, optimism prevails, with 37 percent of companies expecting further growth in business activity.
Close to half of the respondents believe that business conditions will remain stable, as stated in the report.
Investment sentiment is encouraging, with 47 percent of firms intending to boost capital expenditures, spurred by favorable demand prospects, according to the findings.
However, hiring trends remain conservative, as businesses adopt a careful strategy regarding workforce expansion.
This approach reflects a broader strategy focused on maintaining operational efficiency while navigating external uncertainties, the report concluded.
Point of View
It is imperative to acknowledge the resilience of the MSME sector in India amidst global challenges. The PHDCCI's insights underscore the importance of strategic policy support to sustain growth, reflecting a nation-first approach toward economic stability.
NationPress
1 May 2026
Frequently Asked Questions
What is the current status of the MSME sector in India?
The MSME sector is demonstrating resilience with sustained expansion, but it needs timely policy support to maintain this growth.
What does the SME Market Sentiment Index indicate?
The SME Market Sentiment Index shows ongoing growth but a slight moderation in pace due to global challenges.
What are the expectations for the upcoming quarter?
The outlook for the April to June quarter remains optimistic, with many firms expecting further growth in business activity.
How are hiring trends in the MSME sector?
Hiring trends are cautious, with companies taking a measured approach to workforce expansion.
What influences investment sentiment in the MSME sector?
Investment sentiment is driven by positive demand prospects, with many firms planning to increase capital expenditure.
