Confidence surges among small businesses despite global headwinds, reflecting India’s strong economic momentum-ASSOCHAM Dun & Bradstreet Small Business Confidence Index

The ASSOCHAM D&B Small Business Confidence Index for the Oct-Dec 2025 quarter stands at 89.1, up from 79.2 in the previous quarter, reflecting sharp 12.5% q-o-q growth. This improvement signals renewed optimism among small businesses, driven by adaptive strategies to navigate lingering trade and geopolitical uncertainties, as well as strong domestic demand, improved access to credit and expectations of better financing conditions.

The uptick further underscores a shift towards proactive growth planning, operational efficiency and resilience building among small businesses, being supported by targeted government measures and policy incentives aimed at strengthening the business ecosystem. Moreover, India’s economic fundamentals remain strong, supported by easing inflationary pressures, stable liquidity conditions and resilient domestic consumption, collectively setting a constructive tone for growth prospects in coming months.

“The sharp rise in the ASSOCHAM–D&B Small Business Confidence Index reflects the tremendous resilience and growth appetite of India’s small enterprises. Supported by strong domestic demand, targeted policy interventions, easier credit flow and improving market conditions, our SMEs are demonstrating renewed optimism even amid global uncertainties. This surge in confidence reaffirms India’s position as one of the world’s most dynamic and opportunity-rich economies. ASSOCHAM remains committed to empowering small businesses with the platforms, policy support and partnerships they need to scale sustainably and contribute meaningfully to India’s economic transformation,” said Mr. Nirmal Kumar Minda, President, ASSOCHAM.

“The latest Small Business Confidence Index showcases an encouraging revival in sentiment across sales, profitability, investment, and export expectations. India’s SMEs are clearly transitioning from recovery to expansion mode—leveraging digital tools, adopting productivity-led strategies, and responding proactively to new market opportunities. Government reforms in GST, credit access, infrastructure, and digital trade facilitation are playing a pivotal role in enabling this momentum. As small businesses continue to modernise and diversify, ASSOCHAM will deepen its support through knowledge initiatives, global linkages and industry-led policy advocacy to help them drive growth, competitiveness, and long-term resilience,” said Mr. Manish Singhal, Secretary General, ASSOCHAM.

Small businesses are demonstrating renewed confidence, reflected in improving sentiment across key indicators. Recent survey data reveals that 75% of respondents expect higher sales volumes, while 77% anticipate increased domestic orders between Oct and Dec 2025, highlighting strong domestic demand expectations and growing confidence in the economy, supported by improving consumer sentiment. This optimism is further bolstered by targeted government initiatives such as improved credit access for MSMEs, rationalisation of GST, expanded direct benefit transfers to rural households, production-linked incentive schemes and accelerated infrastructure spending.

Export-related confidence has also seen a notable uptick, with optimism around new export orders rising by 9 percentage points on a quarterly basis. This improvement is being supported by targeted domestic export promotion schemes. Recent digital trade facilitation initiatives, such as the launch of the e-Certificate of Origin 2.0 system, the Trade Connect platform and the Jan-Sunwai interface, are enhancing efficiency and transparency. These efforts, coupled with strategic moves to diversify export markets, are equipping businesses to navigate global uncertainties with greater resilience.

“The ASSOCHAM D&B Small Business Confidence Index for Oct-Dec 2025 reflects a strong resurgence in India’s SME sector, underscoring its resilience and agility in a rapidly evolving economic landscape. The rise in sales and domestic order expectations demonstrates how businesses are effectively leveraging policy reforms, improved liquidity, and structural support to drive growth. The concurrent increase in optimism around profitability and capital investment signals a deepening confidence in sustained demand and long-term viability.

Reinforced by the D&B India Business Optimism Index, which shows notable improvements in sales and inventory sentiment across key sectors such as food, beverages, metals, and transportation, this momentum reflects a sector-wide strategic shift. While hiring sentiment remains cautious, the pivot toward productivity-led growth highlights a maturing business outlook focused on competitiveness and value creation. As small businesses navigate global uncertainties, their emphasis on operational efficiency and targeted capital deployment will be critical in sustaining India’s economic momentum,” said Mr. Avinash Gupta, Managing Director, Dun & Bradstreet India.

Financial expectations have improved significantly, with 71% of respondents expecting higher net profits in Oct-Dec 2025 (a 35 percentage points rise on a quarterly basis) largely driven by expectations of sustained strong domestic demand. 60% of the surveyed businesses anticipate an increase in selling prices, signaling confidence in demand resilience.

Investment sentiment is firming up, as 62% of respondents plan to increase fixed capital investments, supported by policy incentives, improved liquidity and expectations of sustained growth, even as hiring expectations moderate to 52%, indicating a strategic shift toward automation and productivity-driven expansion rather than workforce-heavy growth.

Insights from the D&B India Business Optimism Index reinforce this positive outlook, where optimism for sales volume rose by 7 percentage points in (Oct-Dec) 2025 compared to (Jul-Sep), led by food, beverages, metals, and transportation sectors, while construction and ICT remain cautious. Domestic order optimism increased by 4 percentage points, with administrative services, mining, and utilities showing the strongest confidence. Selling price optimism edged up by 2 percentage points, driven by chemicals, capital goods, and automotive sectors. Inventory optimism also improved by 4 percentage points, with electricals, chemicals, and textiles leading the trend.

“India’s calibrated policy approach, rising gold reserves, and expanding international partnerships underscore its continued economic transformation and strategic global positioning, creating a stable and enabling environment for small businesses to thrive. The sharp rebound in the ASSOCHAM D&B Small Business Confidence Index for Oct-Dec 2025 reflects this momentum, supported by resilient domestic demand and easing inflation.

Export optimism is also gaining strength, supported by accelerated domestic market diversification efforts. Encouraging trends in profitability and investment sentiment suggest that small enterprises are not just recovering but repositioning for long-term resilience. As global uncertainties persist, the ability to embrace automation, diversify markets, and maintain cost discipline will be key to sustaining competitiveness,” said Dr. Arun Singh, Global Chief Economist, Dun & Bradstreet

While external challenges such as competitive imports and global trade frictions persist, businesses are responding with agility, and selective capital deployment. Looking ahead, the ability of small businesses to sustain this positive trajectory will depend on leveraging supportive domestic policies, capitalising on strong domestic demand, diversifying exports, incorporating automation, and maintaining cost discipline. With confidence rebounding and structural reforms continuing, the outlook for the small businesses remains optimistic, signaling a period of strategic growth and resilience.