Steady Optimism Among India's Small and Medium Enterprises Amid Economic Challenges

Overview of Small Business Confidence in India

New Delhi, June 11: Recent findings indicate that optimism among small and medium enterprises (SMEs) in India remains stable, bolstered by robust domestic demand and improved access to financing as monetary conditions become more favorable, according to a report by Assocham released on Wednesday.

The prominent business organization, in collaboration with Dun & Bradstreet, a global leader in business analytics, published the ‘Small Business Confidence Index’ for the April-June 2025 quarter.

The report reveals a slight dip in sentiment among small businesses, with the confidence index decreasing by 1.8% from the previous quarter, now standing at 105.4.

This decline suggests a more cautious perspective among small business leaders.

Despite this, the index remains strong, reflecting a 6% increase year-over-year and significantly above the long-term average.

Sanjay Nayar, President of Assocham, noted, “It is heartening to see the underlying strength of domestic demand, improved hiring intentions, and expectations of enhanced financing access as monetary conditions ease. Assocham is dedicated to collaborating with all stakeholders to foster an environment conducive to economic growth.”

As external uncertainties grow, maintaining confidence will depend on how well businesses manage input costs, protect profit margins, and adjust investment strategies to changing market conditions.

The report emphasizes that reinforcing domestic support while addressing external risks is essential for sustaining the growth of India’s small business sector in the coming quarters.

Manish Singhal, Secretary General of Assocham, stated, “The small business sector is a crucial engine of the Indian economy. For these enterprises to flourish, improved financing options, consistent policies, and collaborative efforts among stakeholders are vital to navigate short-term challenges and achieve long-term growth.”

The Index illustrates a resilient yet cautious sentiment among small enterprises.

Avinash Gupta, Managing Director of Dun & Bradstreet India, explained, “While small businesses are capitalizing on domestic advantages, rising costs and weaker global demand are leading to a more conservative stance on pricing and inventory management. Continued recovery will depend on businesses maintaining operational flexibility and adapting to shifting global trade dynamics.”