India Inc Sees Significant Boost in Business Confidence for Q2 FY27, According to CII Survey
Business confidence among Indian companies surged in the second quarter of FY27, according to a recent survey by the Confederation of Indian Industry (CII). The CII Business Confidence Index climbed to 66.0, up from 60.8 in the previous quarter, reflecting stronger expectations for demand, capacity utilization, and hiring despite ongoing global uncertainties.
Improved Expectations and Current Conditions
The survey revealed that the Expectation Index, which gauges future outlook, jumped to 67.7 from 60.6. Meanwhile, the Current Situation Index saw a slight increase to 62.6 from 61.2, indicating that expectations are improving at a faster rate than current assessments. This data comes from the 136th Round of CII’s Quarterly Business Outlook Survey, which included responses from over 240 companies across various sectors and regions.
Demand and Capacity Utilization
The findings indicate a positive outlook for domestic demand, with 61% of respondents anticipating an increase in demand for Q2FY27. Only 9.6% expect a decline. Additionally, the proportion of companies expecting demand growth of more than 20% rose to 16% from 12.9% in the previous quarter. Companies are preparing for increased production, with 51.6% expecting capacity utilization to exceed 80% in the latter half of 2026, up from 36.6% for the first half.
Hiring and Economic Growth
Hiring plans reflect this optimistic sentiment, as 53% of respondents plan to expand their workforce in Q2FY27. This survey coincides with stronger-than-expected economic growth, with India’s real GDP expanding by 7.8% in Q1FY27, compared to 6.9% in the same quarter last year. Manufacturing and services sectors reported growth rates of 9.2% and 10%, respectively.
Cost Pressures and External Risks
Cost pressures have shown signs of moderation, with the percentage of companies expecting input costs to rise decreasing to 61.1% in Q2FY27 from nearly two-thirds in the previous quarter. However, businesses remain cautious about external risks, identifying global trade uncertainty as the primary concern for the next six months, followed by volatility in commodity prices.
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