NewKerala.com

India's MSME Sector Revives: 86% Expect Growth in 2026 on Festive Boost

A new report indicates early signs of revival in India's MSME sector, with nearly eight in ten firms reporting improved performance recently. The optimism is driven by strong festive sales, improved cash flow from digital transactions, and benefits from GST 2.0. Over 70% of MSMEs plan physical expansion, and more than half intend to seek business loans in 2026 for growth. Expectations for the upcoming budget center on easier access to working capital and further simplification of government schemes and compliance.

Key Points: MSME Revival: 86% Expect 2026 Growth, Festive Sales & GST 2.0 Aid

  • 86% of MSMEs expect business growth in 2026
  • 71% plan to expand shops or open new outlets
  • Strong optimism in beauty, wellness, auto & F&B sectors
  • Over half plan to seek business loans for expansion
  • Merchant digital transactions surged during festive months
2 min read

India's MSME sector shows early revival as 86 pc expect growth in 2026

India's MSME sector shows revival signs with 86% expecting 2026 growth. Report cites festive sales, GST 2.0, and digital payments as key drivers.

"The study points to early green shoots across the MSME sector. - Arun Nayyar"

New Delhi, Jan 13

India's MSME sector is showing early signs of revival with nearly eight in ten firms reporting improved performance in recent months and 86 per cent expecting business growth in 2026, a report said on Tuesday.

The report from an SME focused NBFC NeoGrowth found constructive optimism driven by strong festive sales, improved cash flow and GST 2.0 benefits.

The study of over 2,000 MSMEs across over 25 cities found that over 71 per cent of MSMEs plan to expand shops or open new outlets and 30 per cent intend to add products or brands, signalling a shift from short‑term recovery to medium‑term confidence, the report said.

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, the report said.

"The study points to early green shoots across the MSME sector. Festive demand, coupled with stronger digital payment adoption and GST 2.0 benefits has started to support business momentum. Measured confidence among MSMEs, with growth plans is notable," said Arun Nayyar, Managing Director and CEO, NeoGrowth.

MSMEs expectations from Budget 2026 centre on measures that can reinforce operational ease and continuity. Businesses prioritised timely access to working capital, smoother and faster access to existing government schemes. Around a quarter of MSMEs highlighted the importance of faster and improved access to government schemes, alongside continued simplification of GST and compliance processes.

Merchant‑led digital transactions surged during the festive months, with UPI processing a record Rs 27.28 lakh crore across 20.7 billion transactions in October, improving cash‑flow visibility for MSMEs, the report said.

This festive-led uplift, supported by GST 2.0 rate rationalisation, helped ease pricing pressure across mass-consumption categories and contributed to better realised revenues.

Over half of surveyed MSMEs plan to seek business loans in 2026 for expansion, inventory build‑up and working capital, with credit intent more pronounced in electronics, mobile and personal services, the report noted.

- IANS

Share this article:

Reader Comments

P
Priya S
My beauty salon in Bangalore is part of this trend! We've seen a 30% increase in clients post-festive season. Planning to open a second outlet next year. The optimism is real, but the government must simplify loan processes for small business owners like us. The intent is there, execution needs to match.
R
Rohit P
Good to see data backing up what we feel on the ground. Our family's F&B business in Delhi did record Diwali sales. UPI is a game-changer for transparency and cash flow. However, I hope this growth is inclusive and reaches smaller towns beyond the 25 cities surveyed.
S
Sarah B
Working with MSME suppliers in the textile sector, I've noticed this cautious optimism. They are more willing to discuss expansion now than last year. GST 2.0 benefits are a relief, but continuous simplification is key. Timely access to schemes is the biggest ask.
V
Vikram M
While the report is positive, let's be realistic. "Expecting growth" and "achieving growth" are different. My electronics repair shop in Chennai still faces stiff competition from online giants. Easier loans would help, but market protection for genuine small businesses is also needed. The revival must be sustainable.
K
Kavya N
Heartening news! The MSME sector is the backbone of our economy. The shift from recovery to expansion plans is a very good sign. Hope the government listens to the budget expectations, especially on faster scheme access. Jai Hind!

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

Leave a Comment

Minimum 50 characters 0/50