Mumbai, August 21st, 2025: 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) 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:
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The overall FCI increased by 0.5% QoQ and ICI reduced by 1% QoQ.
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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.
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Financial confidence for large businesses remained high at 4% QoQ whereas small and medium businesses reflected cautionary trends.
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Investment confidence increased for medium-sized businesses at 12% QoQ, whereas small and large businesses showed a decline in confidence.
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The FCI in India grew by 0.5% as compared to the global FCI, which declined by 3%.
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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.
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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.
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