Reflecting India’s strong economic growth and rising optimism across industries, the Confederation of Indian Industry’s (CII) Business Confidence Index (BCI) rose to 66.0 in the second quarter of fiscal year 2026-27 (Q2FY27), its highest level in recent quarters, from 60.8 in the preceding quarter. The sharp increase signals a broad-based improvement in business expectations and indicates that India Inc remains optimistic about the economic outlook for Q2FY27, as disruptions arising from the West Asia crisis gradually ease and economic momentum is expected to remain sustained.
Chandrajit Banerjee, Director General, CII, said, “The optimism shown by businesses, as reflected in the BCI, is a clear testament to the inherent resilience of the Indian economy even as geopolitical uncertainty continues. The steady improvement in business activity, backed by robust domestic demand and stable macroeconomic indicators, reinforces the perception that the government’s facilitative policies will support a faster expansion in output and new orders, creating fresh opportunities for firms in India and abroad.”
The findings are based on the 136th Round of CII’s Quarterly Business Outlook Survey, which received responses from more than 240 companies across sectors, regions and firm sizes. The survey findings come at an important juncture for the economy. The latest estimates released by the Ministry of Statistics and Programme Implementation (MoSPI) showed that India’s real GDP grew by 7.8 per cent in the first quarter of the current fiscal year, compared with 6.9 per cent in the corresponding quarter of the previous fiscal year. The survey results reinforce that the better-than-expected GDP growth is not merely statistical but reflects a genuine improvement in on-ground economic activity. The manufacturing sector grew by 9.2 per cent in Q1FY27, while the services sector expanded by 10 per cent during the corresponding period.
Besides, both components of the BCI - the Current Situation Index (CSI) and the Expectations Index (EI) - improved during the quarter. However, the increase was led primarily by a sharp rise in the Expectations Index, highlighting growing confidence about future business prospects. The EI climbed to 67.7 in Q2FY27 from 60.6 in Q1FY27, significantly outpacing the CSI, which rose more moderately to 62.6 from 61.2. The widening gap between the two indices underlines industry’s expectation that business conditions in the coming quarter will be appreciably stronger than those prevailing currently. It also indicates that firms are looking beyond near-term challenges and anticipating a more favourable operating environment.
