Business confidence among Indian companies improved sharply in the second quarter of FY27, with firms expecting stronger demand, higher capacity utilisation and increased hiring despite continuing global uncertainties, according to a Confederation of Indian Industry (CII) survey.The CII Business Confidence Index rose to 66.0 in the April-June quarter from 60.8 in the preceding three months, with the improvement led by companies’ expectations of better business conditions ahead.The Expectation Index, which measures the outlook for the coming quarter, jumped to 67.7 from 60.6. The Current Situation Index, meanwhile, rose to 62.6 from 61.2, indicating that expectations are improving faster than assessments of current conditions.The findings are based on the 136th Round of CII’s Quarterly Business Outlook Survey, which drew responses from more than 240 companies across sectors, regions and different firm sizes.The stronger outlook is being reflected in expectations for domestic demand. About 61% of respondents expect demand to increase in Q2FY27, while only 9.6 per cent foresee a decline. The share expecting demand to grow by more than 20 per cent also increased to 16 per cent from 12.9 per cent in the previous quarter.Companies are consequently preparing for higher production. The proportion expecting capacity utilisation to exceed 80% in the second half of 2026 rose to 51.6 per cent, from 36.6 per cent for the first half. CII said sustained high utilisation could encourage private-sector investment in the coming quarters.Hiring plans also point to stronger business activity, with 53 per cent of respondents expecting to expand their workforce in Q2FY27.The survey comes against the backdrop of stronger-than-expected economic growth. India’s real GDP expanded 7.8 per cent in Q1FY27, compared with 6.9 per cent in the corresponding quarter of the previous fiscal, according to MoSPI. Manufacturing grew 9.2 per cent, while services recorded 10 per cent growth.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 the 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.“Cost pressures also showed some moderation. The share of companies expecting input costs to rise fell to 61.1 per cent in Q2FY27 from nearly two-thirds in the previous quarter, potentially offering some relief to corporate margins.However, businesses remain cautious about external risks. Global trade uncertainty was identified as the biggest risk over the next six months, followed by volatility in commodity prices.“Industry sentiment has turned a corner, and this is no coincidence,” Banerjee said. “When business confidence, macroeconomic indicators and ground-level activity move in tandem, they point to a growth cycle that is increasingly broad-based, durable and sustainable.”Overall, the survey points to strengthening confidence among Indian businesses, with robust domestic demand, investment intentions and hiring plans supporting the growth outlook even as global trade and commodity-related risks remain.
