Industry confidence hits five-quarter high in Oct-Dec period: CII survey

Industry confidence rose to a five-quarter high in the December quarter of FY26, supported by steady domestic demand

Business confidence in India Inc rose to a five-quarter high in the December quarter of FY26, amid further reform expectations and steady domestic demand, a survey by industry body Confederation of Indian Industry (CII) showed.

 

The CII Business Confidence Index (BCI) rose for the third consecutive quarter to 66.5 in the December quarter from 66 in the preceding September quarter.

 

“This marks the highest level recorded in the last five quarters, reflecting a sustained improvement in business sentiment. The sequential uptick in confidence is indicative of improving demand conditions, greater clarity on policy direction, and continued optimism around investment and capacity expansion plans,” the survey said.

 

Two-thirds of firms reported higher demand in Q2 FY26, while 72 per cent expect further growth in Q3 FY26, aided by Goods and Services Tax (GST) rate cuts and festive consumption. Forty-three per cent of respondents expect the GST rate cut to boost consumption in six to 12 months, while 30 per cent expect the boost to last for 12 months.

 

“The steady rise in business confidence shows industry’s ability to navigate external headwinds, anchored by resilient domestic demand and a robust reform agenda,” Chandrajit Banerjee, director general at CII, said.

 

A majority of respondents to the survey (69 per cent) expect the Reserve Bank of India (RBI) to cut rates in its Monetary Policy Committee (MPC) meeting in February. Of them, more than half expect the rate cut to be higher than 25 basis points, due to a benign inflation trajectory. Meanwhile, 21.7 per cent of respondents expect the RBI to maintain the rate at the current level.

 

For the upcoming Union Budget 2026-27, the CII has called for the launch of National Infrastructure Pipeline (NIP) 2.0, with a Rs 150 trillion outlay, focusing on revenue-generating projects and smooth dispute-resolution mechanisms to accelerate infrastructure delivery and attract private investment.

 

It has also called for the creation of an India Development and Strategic Fund (IDSF) to mobilise large pools of domestic institutional capital and foreign investment. Additionally, the CII has suggested a Rs 10 billion digitisation fund to speed up regulatory digitisation, streamline compliance through unified digital systems, and reduce the compliance burden for businesses.

 

Additionally, it has recommended emphasis on speeding up innovation, research and development, suggesting the establishment of 10 Centres of Advanced Learning and Research (CALRs), each with a budget of Rs 10 billion, focused on domains such as artificial intelligence, quantum, advanced materials, robotics, clean energy and biotechnology.

 

“Sustained reform and a strong industry–government partnership will enable India to maintain world-leading growth while ensuring that opportunity reaches every household,” Banerjee added.