Business confidence among India Inc has plummeted to its third-lowest point ever, according to the latest BT-C Fore Business Confidence Survey of 500 CEOs and CFOs for the second quarter of financial year 2026-27 (Q2FY27). The Business Confidence Index (BCI) registered 44.6 for the July–September period, a notable drop from 47.2 in the preceding quarter. A reading below 50 signifies a prevailing mood of caution and souring sentiment across the corporate landscape.
This quarter's BCI stands just above the record lows recorded during the Covid-19 pandemic, which saw readings of 43.2 in April–June 2021 and 43.8 in October–December 2020. The survey was conducted between June 2 and 13, 2026, just prior to the finalization of an interim peace deal between the US and Iran.
Widespread Caution Across Sectors and Sizes
The survey highlighted that this cautious sentiment is not isolated but is broadly distributed across various sectors and business sizes. Light industry, which encompasses segments like food products, beverages, textiles, and furniture, reported the lowest confidence level at 43.9. Similarly, micro industries were the most affected in terms of business size, registering a BCI of 43.7 for Q2FY27.
Geopolitical Instability Fuels Uncertainty
Initial optimism following an interim peace agreement between the US and Iran had led to a normalization of the geopolitical situation, easing crude oil prices below $70 per barrel and reopening the Strait of Hormuz. However, renewed tensions have emerged as US President Donald Trump initiated fresh strikes on Iran, injecting new uncertainties into the global economic outlook.
“The peace agreement between the US and Iran is the key risk in the second half of this year. It will determine whether the global economy gets an energy-driven disinflation tailwind or absorbs a second oil shock. Recent developments highlight that it’s the key domino that will determine whether other risks are amplified or dampened,” noted Ryan Sweet, Chief Global Economist at Oxford Economics.
Slower Growth Forecast for India
Economists and experts are now projecting slower economic growth for India this fiscal year. While the Reserve Bank of India (RBI) has pegged GDP growth for FY27 at 6.6%, both the International Monetary Fund (IMF) and the Asian Development Bank (ADB) have revised down their growth forecasts for the nation. The ADB, in its July 2026 Asian Development Outlook update, lowered India’s FY2026-27 growth forecast to 6.6% from an earlier 6.9%. The IMF similarly reduced its projection for India’s GDP growth to 6.4% this fiscal, down from its previous estimate of 6.5%.