The Confederation of Indian Industry (CII) has released its latest Business Confidence Index. It shows a clear upward trend for Indian businesses. Confidence among industry leaders has climbed for the third consecutive quarter. This positive movement occurred during the October to December period of 2025.
Index Reaches Highest Level in Five Quarters
The CII's Business Confidence Index rose to 66.5 in the December quarter. This marks the highest level recorded in the last five quarters. The index stood at 66.2 during the same quarter one year ago. The steady rise reflects a sustained improvement in overall business sentiment across the country.
Key Drivers of Optimism
Several factors are fueling this growing optimism. The survey points to improving demand conditions within the domestic market. There is also greater clarity on the government's policy direction. Companies remain optimistic about their investment plans, profitability, and capacity expansion.
Domestic demand stands out as the primary anchor for confidence. Two-thirds of the surveyed firms reported higher demand in the September quarter. An impressive 72% expect further growth in the December quarter. This demand is being supported by recent GST rate cuts and strong festive season consumption.
Resilience Amid Global Challenges
CII highlighted India's remarkable economic resilience. The nation is navigating a complex global landscape marked by geopolitical tensions and a slowing world economy. The industry body credits this resilience to a robust domestic market and a continuous agenda of economic reforms.
The survey gathered responses from more than 175 firms. It was conducted in the first three weeks of December 2025. The sample included micro, small, medium, and large enterprises from all industry sectors and regions.
Industry Leadership Weighs In
CII Director General Chandrajit Banerjee commented on the findings. He stated that the steady rise demonstrates the industry's ability to navigate external challenges. This ability is anchored by resilient domestic demand and a strong reform agenda. Banerjee added that industry anticipates the growth momentum will strengthen further in the coming months.
Budget Expectations and Reform Momentum
Looking ahead, CII expressed confidence that the reform momentum will continue. The industry body is actively engaging with policymakers on the next set of reforms. These discussions are happening ahead of the forthcoming Union Budget.
CII is pushing for the government to sustain high levels of capital expenditure. This spending is part of the massive ₹150 trillion National Infrastructure Pipeline. The focus, according to CII, should be on shovel-ready and revenue-generating projects. Streamlining dispute-resolution mechanisms is also seen as crucial to accelerate infrastructure delivery and attract more private investment.
Long-Term Growth Outlook
As India moves into the next decade, CII emphasizes that the need for reforms remains clear. The lobby group outlined several priority areas for sustained growth:
- Continued investment in physical infrastructure and digital systems.
- Further simplification of regulatory processes.
- Expanding opportunities for households.
- Strengthening business research and development capabilities.
CII is also advocating for new funding mechanisms. These would help mobilize domestic institutional capital and foreign investment. The goal is to support small businesses, the energy transition, human capital development, and strategic overseas acquisitions.
Economic Projections and Fiscal Context
The government's first advance estimates project India's economy to grow by 7.4% in the current financial year. This is an upward revision from earlier projections of 6.3–6.8%. Strong manufacturing and services output, healthy household spending, and firm fixed investment are supporting this growth.
However, nominal GDP growth is expected to be around 8%. This lags behind the 10.1% assumption made in the Union Budget. Separately, rating agency ICRA Ltd. expects the Centre to raise capital expenditure to ₹13.1 trillion in FY27. This is up from ₹11.21 trillion projected for FY26. ICRA notes that fiscal pressures may rise from FY28 due to higher committed spending linked to future pay commission recommendations.
