India's business sentiment shows cautious optimism in Q3 2025, with medium enterprises leading investment confidence amid global uncertainty

PRNewswire
Mumbai (Maharashtra) [India], August 21: A recent survey on Financial Confidence and Investment Confidence, conducted by Dun & Bradstreet India, a leading global provider of business decisioning data and analytics, found that while overall business confidence in investing in new projects and financial conditions has improved marginally, optimism among small businesses has reduced significantly on both fronts.
Dun & Bradstreet's India Financial and Investment Confidence Indices Report (IFCI), offers a comprehensive quarterly assessment of business sentiment regarding investment confidence and financial conditions in India. It measures expectations through two distinct indices--the Financial Confidence Index (FCI) and Investment Confidence Index (ICI).
The overall ICI declined marginally by 1% and the FCI increased by 0.5% in Q3 2025, reflecting cautious sentiment amid rising uncertainty around trade policy and its impact. The global trend shown in our latest Global Business Optimism Insights report shows Soaring employment costs are squeezing investment plans, with 1 in 2 businesses citing labor pressures as a key barrier to growth. However, medium businesses remain significantly optimistic about the capital-raising environment, indicating continued expansion and confidence in the Indian economy. Small businesses show tempered optimism, but their decline in ICI and FCI is considerably lower than the global trend for small businesses shown in our latest Global Business Optimism Insights report--where ICI dropped by 11% QoQ and FCI fell by 22%. In contrast, India's FCI for small businesses declined only by 7%. This resilience is supported by positive domestic indicators, such as a 13% YoY increase in bank credit to small manufacturing businesses, an 8.7% YoY rise in credit to the services sector, and a historic low in Gross Non-Performing assets NPAs in May 2025. These factors suggest a conducive environment that may help revive optimism and improve business prospects in the coming quarters.
Key findings from the survey:
- The overall FCI increased by 0.5% QoQ and ICI reduced by 1% QoQ.
- Investment optimism among small-scale businesses rose 12% QoQ, driven by supportive policy measures and expectations of interest rate cuts, which are expected to boost demand.
- Financial confidence for large businesses remained high at 4% QoQ whereas small and medium businesses reflected cautionary trends.
- Investment confidence increased for medium-sized businesses at 12% QoQ, whereas small and large businesses showed a decline in confidence.
- The FCI in India grew by 0.5% as compared to the global FCI, which declined by 3%.
- ICI and FCI for India's services sector grew by 3% and 2% QoQ respectively, compared to a fall globally by 2% for FCI and 11% for ICI.
- Hiring confidence (confidence for employment) has reached an all-quarter low, falling by 18% QoQ.
Commenting on the findings of the survey, Dr. Arun Singh, Global Chief Economist, Dun & Bradstreet, said, "India's business sentiment in Q3 2025 reflects cautious optimism amid global volatility. Confidence in the domestic economy remains relatively resilient--especially when viewed against global trends. Medium enterprises lead this optimism, driven by improving conditions for capital-raising and supportive policy signals. Small businesses also show signs of renewed confidence, supported by rising credit availability and historically low non-performing assets. However, rising labor costs continue to weigh on investment decisions, and uncertainty around international trade policy remains a drag on broader sentiment. As global risks persist, clarity in external conditions coupled with stable domestic fundamentals will be crucial for sustaining business confidence and unlocking future investment potential."
To know more or gain access to the report, write to us at india@dnb.com .
About Dun & Bradstreet:
Dun & Bradstreet , a leading global provider of business decisioning data and analytics, enables companies around the world to improve their business performance. Dun & Bradstreet's Data Cloud fuels solutions and delivers insights that empower customers to accelerate revenue, lower cost, mitigate risk and transform their businesses. Since 1841, companies of every size have relied on Dun & Bradstreet to help them manage risk and reveal opportunity. For more information on Dun & Bradstreet, please visit www.dnb.com .
Dun & Bradstreet Information Services India Private Limited is headquartered in Mumbai and provides clients with data-driven products and technology-driven platforms to help them take faster and more accurate decisions in domains of finance, risk, compliance, information technology and marketing. Working towards Government of India's vision of creating an Atmanirbhar Bharat (Self-Reliant India) by supporting the Make in India initiative, Dun & Bradstreet India has a special focus on helping entrepreneurs enhance their visibility, increase their credibility, expand access to global markets, and identify potential customers & suppliers, while managing risk and opportunity. Dun & Bradstreet India is also proud to be Great Place to Work® Certified (2025-26), a recognition of its commitment to fostering a high-trust, high-performance workplace culture.
India is also the home to Dun & Bradstreet Technology & Corporate Services LLP, which is the Global Capabilities Center (GCC) of Dun & Bradstreet supporting global technology delivery using cutting-edge technology. Located at Hyderabad, the GCC has a highly skilled workforce of over 500 employees, and focuses on enhanced productivity, economies of scale, consistent delivery processes and lower operating expenses.
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