A new survey by the Confederation of Indian Industry (CII) indicates that India’s improving macroeconomic performance is not translating equally across the business sector. Around half of the surveyed companies said the country’s strong economic performance has either not improved their own business conditions or has done so only partially.
At the same time, overall corporate sentiment has strengthened significantly. The CII Business Confidence Index rose to 66.0 in Q2 FY27 from 60.8 in Q1 FY27, reflecting greater optimism about demand, operating conditions and business activity.
Business Confidence Improves in Q2 FY27
The survey points to a more positive outlook among Indian companies, supported by expectations of stronger domestic demand and improved operating conditions.
The improvement in confidence suggests that businesses are becoming more optimistic about the near-term economic environment. Expectations around capacity utilisation and employment have also strengthened, indicating that companies may be preparing for increased activity.
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Demand and Hiring Outlook Strengthen
The survey indicates that domestic demand remains an important driver of business confidence. A significant share of respondents expects demand to improve further, while more companies are anticipating higher capacity utilisation in the second half of 2026.
Hiring intentions have also improved, with a majority of surveyed businesses indicating plans to expand their workforce during Q2 FY27. These expectations point towards a potentially broader improvement in business activity if demand remains resilient.
Global Risks Remain a Concern
Despite the stronger confidence reading, companies continue to identify external risks. Global trade uncertainty and commodity price volatility remain important concerns for businesses, while domestic demand and monsoon-related risks are also being monitored.
The mixed responses highlight a gap between headline macroeconomic performance and the experience of individual businesses. While aggregate indicators remain encouraging, the survey suggests that the benefits of economic growth are not yet being felt uniformly across India Inc.
A Mixed but More Positive Business Outlook
The CII survey presents a nuanced picture of the Indian economy. Business confidence has risen substantially, but the fact that about half of respondents report only limited or no improvement in their own performance shows that the recovery remains uneven.
If stronger demand, capacity utilisation and business activity continue, the improved sentiment could gradually translate into wider gains for companies and employment. However, global uncertainty and cost pressures remain factors that businesses will need to watch closely.
Source attribution: Based on reporting by The Hindu on the CII Business Outlook Survey, with current survey figures cross-checked against recent coverage of the CII Business Confidence Index.