Indian SME Sector Poised for Robust Growth in FY2026: PHDCCI Survey

PHDCCI's latest survey reveals strong growth prospects for India's SME sector in Q1 FY2026, highlighting an SME Business Outlook Index of 60.3. The survey shows optimism among SME firms, citing anticipated business activity improvement, increased hiring, and capital expenditure rise. Government initiatives played a vital role in this positive trend.

A recent survey conducted by the industry body PHDCCI has unveiled positive growth prospects for India's SME sector as we head into the first quarter of the financial year 2026 (Q1 FY2026). The study, which encompassed 3,000 SME firms from various manufacturing units across India, revealed a SME Business Outlook Index (SME-BOI) score of 60.3, suggesting a buoyant confidence in the economy.

Notably, the SME Market Sentiment Index indicates a surge in business activity for the fourth quarter of financial year 2025 (Q4 FY2025) as compared to the preceding quarter. The SME Business Activity Index (SME-BAI) climbed to 57.7 points, signifying a substantial expansion in manufacturing activities. The rise is largely attributed to a strong New Orders Index of 71.7 and an Output/Production Index of 66.7, reflecting a vibrant business environment and increased manufacturing momentum.

Furthermore, the report highlights the impact of the government's proactive measures, including credit support and infrastructure development, on revitalizing the SME sector. Both the SME-BOI and SME-BAI are instrumental in gauging the health and outlook of the manufacturing sector, ultimately serving as critical tools for assessing market conditions. As emphasized by PHDCCI officials, future plans include the introduction of indices related to exports and the services market to further strengthen SME growth.