World · India Bureau
Indian business confidence surges in Q2 FY27, snapping losing streak
Business sentiment in India has rebounded sharply in the second quarter of FY27, marking the first quarterly gain in over a year as firms grow more optimistic about demand prospects. However, employment expansion remains constrained, suggesting businesses are cautiously managing headcount despite improved outlook.
LSN India ·
Business confidence in India has staged a notable recovery in Q2 FY27, with the National Council of Applied Economic Research's Business Confidence Index climbing to 107.8 from 99.8 in the preceding quarter. The 8-point jump represents a significant turnaround after four consecutive quarters of contraction, signalling renewed optimism among corporate decision-makers about near-term economic prospects.
The rebound reflects strengthening demand expectations among surveyed businesses, with firms anticipating improved sales and revenue generation in the coming months. This sentiment improvement spans multiple sectors, indicating broad-based confidence rather than isolated pockets of optimism within the business community.
Yet the recovery presents a mixed picture. While sentiment has improved substantially, hiring intentions remain subdued across the business landscape. Companies are approaching workforce expansion cautiously despite growing confidence in demand, suggesting management remains wary of overcommitting on fixed labour costs even as they prepare for higher activity levels.
The divergence between confidence and hiring plans may reflect persistent uncertainty about the durability of the demand recovery or ongoing efforts by businesses to achieve operational efficiency through technology and process improvements. Analysts will be closely watching whether the confidence rebound translates into more robust employment growth in subsequent quarters, as this would signal deeper-rooted economic momentum beyond sentiment shifts.