New Delhi, Jan 18 (PTI) Rising for the third consecutive quarter, CII's Business Confidence Index climbed to a five-quarter high of 66.5 in Q3 FY26, driven by optimism around demand, profitability, and investment
conditions, the industry lobby said on Sunday.
Domestic demand remains the key driver, with two-thirds of firms reporting higher demand in Q2 FY26 and 72 per cent expecting further growth in Q3 FY26, aided by GST rate cuts and festive consumption, the industry body said in the survey.
CII-Business Confidence Index (BCI) is based on a sample survey of firms covering all industry sectors, including micro, small, medium, and large enterprises, from different regions.
The survey also enumerated responses across industry groups, both in the public and private sectors, engaged in the manufacturing and services sectors. It was conducted during the first to third week of December 2025, covering more than 175 firms of varying sizes.
Moreover, investment and hiring intentions remain robust.
Notably, 69 per cent of respondents expect the RBI to cut the repo rate by the end of Q4 FY26 (January-March end).
CII expressed confidence that the reform momentum will continue in the Budget to sustain India's growth.
The survey also revealed a boost to sales from GST cuts effective from September 22, as 56.3 per cent of respondents expect their sales to increase between 5 and 20 per cent in the coming quarters.
Driven by bold reform initiatives, India has firmly established itself as the world's fastest-growing major economy, demonstrating remarkable resilience amid global uncertainty shaped by geopolitical tensions, trade weaponisation, and a slowing world economy, the industry body said.
"The steady rise in business confidence shows industry's ability to navigate external headwinds, anchored by resilient domestic demand and a robust reform agenda," CII Director General Chandrajit Banerjee said.
The industry anticipates the growth momentum to strengthen further in the months ahead, he added.
For the Union Budget for 2026-27, CII has suggested sustaining capital expenditure, wherein a revitalised Rs 150-lakh crore National Infrastructure Pipeline (NIP) 2.0 could be launched.
The focus should be on shovel-ready, revenue-generating projects and streamlined dispute-resolution mechanisms to accelerate infrastructure delivery and crowd-in private investment, the industry lobby said.
CII also called for robust development and strategic funding mechanisms to enhance India's long-term competitiveness.
At the heart of this is the creation of an India Development and Strategic Fund (IDSF), which can be a sovereign-anchored platform to mobilise large pools of domestic institutional capital and foreign investment.
IDSF could operate through two complementary arms -- a developmental arm to support domestic priorities, such as MSMEs, energy transition, and human capital; and a strategic arm to enable overseas acquisitions and partnerships that secure India's long-term economic and security interests.
CII has also suggested a Rs 1,000-crore Digitisation Fund to accelerate India's regulatory digitisation, advancing the Unified Enterprise Identity, Entity Locker, API-based compliance, upgraded e-Gazette and India Code, and a National Compliance Grid, eliminating duplication, enabling real-time data flows, and creating paperless, presence-less digital rails that cut compliance burdens and boost ease of doing business.
Emphasising accelerating Innovation and R and D, the industry body has suggested establishing 10 Centres of Advanced Learning and Research (CALRs), each with a budget of Rs 1,000 crore, focused on frontier domains, such as AI, quantum, advanced materials, robotics, clean energy, and biotechnology.
These could be operated through a public-private co-funding model with matched industry-government contributions. This could be complemented by an India Talent Agency in major global hubs to attract top talent, engage diaspora researchers, and position India as a global innovation leader.
To strengthen India's global integration, CII recommended enabling trade and exports through a simplified three-tier tariff structure, with low tariffs on inputs and moderate tariffs on intermediates, to enhance competitiveness, integrate into global value chains, and promote export diversification.
Besides, it advocated a comprehensive strengthening of India's banking ecosystem by enhancing the capital base of Development Financial Institutions, enabling selective NBFC to bank transitions, allowing calibrated foreign equity, encouraging the entry of well-capitalised new banks, and consolidating weaker institutions to improve scale and efficiency.
An expert committee, on the lines of the earlier Narsimhan Committees, could be set up to reassess banking structures, ownership and governance norms, capital frameworks, and long-term institutional design for a future-ready financial sector, it suggested. PTI RSN BAL
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