India’s domestic economy display strong fundamentals
India’s small businesses are entering a phase where agility and strategic foresight are more important than ever, says ASSOCHAM Secretary General Manish Singhal in comments on Small Business Confidence Index for the Jul–Sep 2025 quarter having decreased to 79.2.
“Despite short-term moderation in sentiment, the Index highlights how SMEs are proactively adjusting to shifting demand patterns while leveraging export potential,” he said on 26 Aug.
“Their focus on prudent cost management, workforce stability, and selective investments points to a long-term vision rooted in resilience and competitiveness qualities that will continue to drive sustainable growth.”
While the sentiment has moderated compared to the previous quarters, it signals a period of strategic adjustment, as businesses adapt to shifting global dynamics, including geopolitical uncertainties and evolving trade policies, according to the latest finding by ASSOCHAM along with Dun & Bradstreet.
“Importantly, this adjustment phase underscores a growing emphasis on resilience, efficiency, and long-term planning,” said a release from the two institutions.
On the upside, India’s domestic economy continues to display strong fundamentals. Cooling inflation, prospects on continued monetary easing, and a promising start to monsoon season together set a favorable tone for growth and recovery in the coming quarter.
The survey indicates that small businesses are beginning to reassess their operating strategies, as sentiment across several key indicators reflects a shift toward strategic recalibration. While the domestic environment remains broadly supportive, with macroeconomic stability and policy continuity providing a foundation, recent data suggests that firms are adapting to evolving market dynamics with a forward-looking approach.
Domestic orders have moderated, but businesses are maintaining a proactive stance, with 62% of respondents reporting an increase in the volume of sales, reflecting continued activity in core markets. 56% of businesses reported growth in new export orders received, indicating that firms are leveraging global opportunities to diversify revenue streams. This outward orientation suggests resilience and adaptability in the face of domestic demand fluctuations.
“The ASSOCHAM D&B Small Business Confidence Index for Q3 2025 reveals a strategic recalibration among small businesses, as firms adapt to evolving market dynamics with a forward-looking approach,” noted Avinash Gupta, Managing Director, Dun & Bradstreet India.
“Despite a moderation in domestic orders, the sustained momentum in core markets and a rise in new export orders reflect a proactive stance toward global diversification. Stability in selling prices and easing input cost pressures support margin predictability.
“Meanwhile, prudent inventory management and a stable employment outlook underscore operational resilience. As businesses realign investment priorities and navigate external trade frictions, the emphasis on cost optimization and strategic agility will be critical to sustaining performance in a shifting economic landscape.
“This cautious financial sentiment is echoed globally, with Dun & Bradstreet’s Global Business Optimism Index recording a -9.7% dip in financial confidence among small businesses, reaffirming the widespread focus on resilience and stability amid economic headwinds,” he said.
“Small businesses are entering a phase of strategic transformation, balancing domestic stability with global opportunity, as reflected in the ASSOCHAM D&B SBCI Index for Q3 2025. The moderation in domestic orders is being offset by a notable rise in export activity, signaling a shift toward outward-oriented growth,” added Dr Arun Singh, Global Chief Economist, Dun & Bradstreet.
“Encouraging trends in input cost normalization and pricing stability are enhancing cost predictability, while steady employment and inventory levels reflect cautious optimism. As firms recalibrate investment strategies amid persistent global trade uncertainties, Dun & Bradstreet data suggests that the sector’s resilience will hinge on its ability to manage cost structures, preserve flexibility, and prioritize investments that build long-term competitiveness,” he said.
Looking ahead, the ability of small businesses to navigate this evolving landscape will depend on how effectively they manage cost structures, preserve operational flexibility, and prioritize investments that enhance resilience. As domestic momentum moderates and external risks persist, strategic agility will be key to sustaining business confidence and performance, said Dun & Bradstreet. Fiinews.com
