India’s business confidence climbs despite global headwinds: NCAER survey shows upbeat outlook for Indian firms

This marks the third straight quarter of improvement in business sentiment, according to the National Council of Applied Economic Research’s (NCAER) latest Business Expectations Survey.

The survey, conducted in June 2025 across 479 firms in six cities, reflects broad-based confidence across firm sizes and sectors.

Over 72% of respondents believe overall economic conditions will improve in the next six months, up from 64.7% in Q4 FY25.

Similarly, 65.8% expect their financial position to improve, and 60.1% view the current investment climate positively.

A remarkable 97.3% of firms reported operating at or above optimal capacity, indicating strong underlying activity.

Business expectations for production, sales, new orders and exports also strengthened notably in Q1 FY26.

Micro, small, and medium enterprises (MSMEs) reported a BCI increase from 129.8 to 137.1, while large firms (turnover above ₹100 crore) saw confidence rise from 155.9 to 171.6.

Across all firm sizes, optimism about production and demand was evident, with over 78% expecting higher output and sales in the coming months.

Export expectations rose from 57.8% to 66.5%, while the proportion of firms anticipating more new orders jumped from 62.6% to 71.1%.

The outlook on pre-tax profits remained buoyant, with over 60% expecting an increase.

However, the employment outlook stayed muted.

A large majority of firms (77.3%) foresee no change in hiring, and sentiment on wage hikes remains subdued.

Similarly, cost expectations moderated, with fewer firms now anticipating a rise in raw material, electricity, and labour costs compared to the previous quarter.

The NCAER clarified that this round of the survey was conducted before the latest wave of global tariff hikes, but the results suggest Indian businesses are relatively well-positioned to absorb external shocks for now.