India’s MSME sector shows signs of early recovery, expectation of growth in 2026: Study
Mumbai, Jan 12 (BVI): India’s MSME sector is showing early signs of revival and 86% of such enterprises expect their businesses to grow in 2026, according to a latest study.
Nearly eight in ten MSMEs reported better business performance in recent months, while confidence about 2026 has strengthened meaningfully, according to NeoGrowth’s latest NeoInsights report.
The study was conducted among more than 2,000+ MSMEs across over 25 cities, capturing insights into recent performance, credit intent, and expectations for 2026, said a press statement issued by NeoGrowth.
The study found that over 71% MSMEs are planning to expand their shop or open a new outlet, signalling strong confidence in scaling physical presence, it said.
Alongside this, 30% intend to add more products or brands, reflecting efforts to widen offerings and capture incremental demand.
City- and sector level trends show optimism is strongest in consumer facing segments, where demand visibility has improved.
Top industries include beauty & wellness, automobile and food & beverage.
As MSMEs look towards Budget 2026, around a quarter of them highlight the importance of faster and improved access to government schemes, alongside continued simplification of GST and compliance processes.
In addition, a growing share of MSMEs recognise the role of digital tools and online payments in improving efficiency, transparency, and customer reach, underscoring the importance of continued digital enablement across the ecosystem, the statement said.
Over half of MSMEs surveyed indicated plans to take a business loan in 2026, primarily to support expansion, inventory build up, and working capital needs.
Credit intent is seen to be more pronounced in categories such as electronics, mobile, and personal services, where borrowing is viewed as a strategic lever to scale operations.
At the same time, borrowing decisions remain closely linked to future plans, reflecting a cautious and considered approach to business expansion. (BVI)
