Indian Business Confidence Dips Amid Global Uncertainties

Business sentiments in India have moderated during the second quarter of the fiscal year, impacted by global uncertainties such as additional US tariffs. The National Council of Applied Economic Research notes a decline in the Business Confidence Index, driven by mixed macro and micro sentiments across firm sizes.

In the second quarter of the current fiscal year, Indian business sentiments showed a moderate decline following three prior quarters of steady gains, largely due to high global uncertainties including new US tariffs. This is according to the latest Business Expectations Survey conducted by the National Council of Applied Economic Research (NCAER).

NCAER's findings indicate a drop in the Business Confidence Index (BCI) from 149.4 in the first quarter to 142.6, despite being higher than last year's 134.3 for the same period. The survey also highlighted the influence of GST reforms and a reduction in tax rates, with impacts expected to manifest over the coming quarters.

While three out of four survey components showed sentiment moderation, there was an improvement in present capacity utilisation. The survey, conducted amid new US trade measures, recorded varied responses across different firm sizes, with MSMEs witnessing a marginal increase in BCI compared to a notable decline for larger firms.