BT-C Fore Business Confidence survey reveals mood of caution in India Inc in Q2FY27

India Inc has remained cautious about its outlook for the second quarter of the fiscal even as a fragile peace deal in West Asia was first announced and is now beginning to look increasingly shaky.

This was evident in the BT-C Fore Business Confidence Survey of 500 CEOs and CFOs for the second quarter of financial year 2026-27 (Q2FY27), which plummeted to its third lowest level ever. The Business Confidence Index (BCI) contracted to 44.6 for the July–September quarter on a scale of 100, down from 47.2 in the previous quarter. A reading below 50 shows that sentiments have soured and are in the red.

Prior to this, the BCI was at a record low during the Covid-19 pandemic with a reading of 43.2 in the April–June 2021 quarter and 43.8 in the October–December 2020 quarter. The latest survey was conducted between June 2 and 13, right before the peace deal between the US and Iran was firmed up.

The survey also revealed that the mood of caution was spread across sectors and size of businesses. Amongst sectors, light industry—comprising food products and beverages, textiles and furniture, amongst others—registered the lowest confidence at 43.9. In terms of size of businesses, micro industries remained the worst impacted with a reading of 43.7 for the second quarter of the fiscal.

While with the signing of the interim peace deal between the US and Iran, the geopolitical situation had begun to normalise as the Strait of Hormuz opened and crude oil prices eased to below $70 per barrel, there are now fresh tensions and uncertainties as US President Donald Trump has once again launched fresh strikes on Iran.

“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.

For India, economists and experts are pencilling in slower growth this fiscal. While the Reserve Bank of India has pegged GDP growth in FY27 at 6.6%, both the International Monetary Fund and the Asian Development Bank have also lowered their growth forecast for India.

India’s growth forecast for FY2026-2027 has been revised down to 6.6%, from 6.9% projected in April as per the ADB’s latest Asian Development Outlook update for July 2026. The IMF has also projected India’s GDP growth to slow down to 6.4% this fiscal from 6.5% it had estimated earlier.