Metro India News | Hyderabad 

Industry sentiment strengthened further in the third quarter of FY26, with the CII Business Confidence Index rising to a five-quarter high of 66.5, marking its third consecutive quarterly increase. The Confederation of Indian Industry (CII) attributed the improvement to sustained domestic demand, better profitability expectations and stable investment conditions.

According to the survey, domestic demand continues to be the primary growth driver. Nearly two-thirds of the firms reported higher demand in Q2 FY26, while 72 per cent expect demand to rise further in Q3 FY26. Festive season consumption and GST rate cuts have provided a notable boost to sales momentum across sectors.

The survey, conducted during the first three weeks of December 2025, covered over 175 firms from manufacturing and services, including micro, small, medium and large enterprises across regions. It also indicated that investment and hiring intentions remain firm despite global economic uncertainties.

Expectations of monetary easing are also strong, with 69 per cent of respondents anticipating a repo rate cut by the Reserve Bank of India by the end of Q4 FY26. Over half of the respondents said GST cuts effective from September 22 could raise their sales by 5 to 20 per cent in the coming quarters.

CII said India continues to demonstrate resilience as the world’s fastest-growing major economy, even amid geopolitical tensions and slowing global growth. The industry body expressed confidence that the upcoming Union Budget will sustain reform momentum and capital expenditure.

For Budget 2026-27, CII suggested launching a revamped National Infrastructure Pipeline 2.0, proposing initiatives such as a sovereign-backed India Development and Strategic Fund, a Rs 1,000 crore digitisation fund, expanded R&D centres, banking sector reforms and simplified tariffs to enhance competitiveness and long-term growth.