Business Confidence Hits Five-Quarter High as Domestic Demand Stays Strong: CII
CII: The CII Business Confidence Index rose for the third consecutive quarter to 66.5 in October-December, the highest in the past five quarters, CII said in a survey. 72 percent of companies expect further growth in the December quarter due to GST rate cuts and festive consumption.
Business confidence in India is rising. Domestic Demand is strong. As a result, the government is likely to continue with the proposed reforms in the 2026-27 Union Budget. The Confederation of Indian Industry (CII) stated that, according to a survey, the CII Business Confidence Index has increased for the third successive quarter to 66.5 in the October-December period, which is the highest in the past five quarters. 72 percent of firms believe that the December quarter will witness further expansion because of the reduction in GST rates and festive purchases.
Domestic demand has been the main catalyst for the sector, as stated in the survey by the industry association. Two-thirds of the firms reported an increase in demand in the September quarter. The CII Business Confidence Index (BCI) is based on a sample survey of firms and covers all industry segments, including micro, small, medium, and large-scale industries. The survey also includes responses from industry groups in both the public and private sectors, across the manufacturing and services sectors. The survey was conducted between the first and third weeks of December 2025 and covered more than 175 companies of various sizes.
According to the survey, investment and hiring intentions remain strong. 69 percent expect the RBI to cut the repo rate by the end of January-March. The CII expressed confidence that the momentum of budget reforms will continue to sustain India's growth. The survey also revealed that the GST reduction, effective September 22nd, has boosted sales. 56.3 percent expect their sales to increase by 5 to 20 percent in the coming quarters.
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The industry body stated that, driven by bold reform initiatives, India has firmly established itself as the fastest-growing major economy. India's performance has been robust amid global uncertainty stemming from inter-state tensions, the use of trade weapons, and a slowing global economy. The continued growth in business confidence reflects the industry's ability to address external challenges, supported by strong domestic demand and a robust reform agenda.
For the Union Budget 2026-27, CII has recommended maintaining capital expenditure. This could include the launch of a revamped National Infrastructure Pipeline (NIP) 2.0, worth ₹150 lakh crore. The focus should be on projects that can be immediately commissioned and generate revenue. Dispute resolution mechanisms should be streamlined to accelerate infrastructure construction and attract private investment.
