Domestic demand, profits keep India's business sentiment resilient
Business sentiment in India showed optimism on the back of improving profitability and stronger domestic demand in the third quarter of 2026, a report said on Friday.
The report from Dun & Bradstreet said its Business Optimism Index (BOI) stood at 111.8 for Q3 2026, easing a modest 0.7 per cent quarter?on?quarter and 4.8 per cent year?on?year.
Despite the moderation in the headline index, the optimism for profit rose 4.9 per cent quarter?on?quarter to 71.3, while optimism for domestic orders increased 3.4 per cent to 70.3.
The data underscored resilience of domestic market fundamentals amid an uncertain global environment, the report noted.
“Improving profit expectations and strengthening domestic demand continue to anchor business confidence, helping offset weaker export sentiment, softer inventory outlook and continuing global uncertainties,” the firm said.
The quarter showed a mixed business landscape as large enterprises reported a 1 per cent improvement in sentiment QoQ, while small enterprises rose 0.7 per cent.
However, medium enterprises saw optimism ease 4.8 per cent quarter?on?quarter, weighing on the overall index and highlighting an uneven recovery across business segments.
Global uncertainties continued to temper the external outlook even as optimism for export orders improved 0.8 per cent quarter?on?quarter but remained 12.9 per cent lower than a year ago, reflecting weak global demand and ongoing trade-related uncertainties.
Businesses also remained cautious in their operational decisions, with optimism related to inventory levels declining 16.1 per cent QoQ and employment sentiment falling 4.7 per cent sequentially, signalling a measured approach toward inventory build-up and hiring.
Meanwhile, expectations around domestic business conditions remained relatively resilient.
Optimism for the domestic macroeconomic environment was broadly stable, while stronger profit expectations suggest that businesses continue to find support from domestic demand even as external challenges persist.
Optimism was highest in utilities, information and communication, and electricals, while transportation and storage, manufacturing of automotives, and manufacturing of food remain the least optimistic.
