New Delhi, April 20 India’s MSME manufacturing sector continues to show resilience with sustained expansion, but maintaining this growth momentum will require timely policy support and a stable external environment, the PHD Chamber of Commerce and Industry (PHDCCI) said on Monday.
The PHDCCI has released the fourth round of its SME Market Sentiment Index (SMESI), which captures the performance of the manufacturing MSME sector for January–March 2026 and its outlook for the upcoming quarter.
The findings underline that while growth remains intact, the pace has moderated slightly in the face of evolving global challenges.
According to the survey, the SME Business Activity Index (SME-BAI) stood at 56.5 in the March quarter -- indicating continued expansion, though marginally lower than 58.9 recorded in the previous quarter.
Similarly, the SME Business Outlook Index (SME-BOI) came in at 58.7 for April–June 2026 -- reflecting a positive but slightly softer outlook compared to the earlier reading of 60.7.
The report highlighted that growth in business activity continues to be driven by steady new orders and production levels.
Around 37 per cent of surveyed firms reported an increase in new orders, which supported higher output during the quarter.
At the same time, employment levels and supplier delivery timelines remained largely stable, pointing to a cautious yet balanced approach by businesses amid changing conditions.
Looking ahead to the April–June quarter, the outlook remains optimistic, with 37 per cent of firms expecting further expansion in business activity.
Nearly half of the respondents anticipate business conditions to remain unchanged, as per the report.
Investment sentiment appears encouraging, with 47 per cent of firms planning to increase capital expenditure, driven by demand prospects, the report said.
Hiring trends, however, remain measured, with companies adopting a calibrated approach to workforce expansion.
This reflects a broader strategy of maintaining operational efficiency while navigating external uncertainties, the report mentioned.
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