Indian Businesses Turn Prudent on Expansion Amid Moderating Confidence in Margins and Credit Conditions

MUMBAI, India, Dec. 4, 2025 /PRNewswire/ — A recent survey on Financial Confidence and Investment Confidence, conducted by Dun & Bradstreet India, a leading global provider of business decisioning data and analytics, indicates that global uncertainty has dampened investment and financial confidence among businesses, signaling expectations of tighter liquidity ahead and a lower appetite for new investments and capital spending.

Dun & Bradstreet’s India Financial and Investment Confidence Indices Report (IFICI), offers a comprehensive quarterly assessment of business sentiment regarding investment confidence and financial conditions in India, measured through two indices—the Financial Confidence Index (FCI) and Investment Confidence Index (ICI).

Against a shifting global macroeconomic backdrop Indian businesses are turning more cautious on investment and finances, despite ongoing supportive structural reforms and digital economy tailwinds. Bank credit growth in September 2025 eased to 10.4% YoY, although GST rate rationalisation and RBI liquidity infusion measures are poised to support consumption and ease financing conditions in the coming quarters. Concurrently, large strategic bets on AI infrastructure amounting to USD18bn (including Google’s announced USD15bn investment to set up an AI hub in the country) underscore medium-term confidence in India’s digital capacity and jobs pipeline.

Yet, our latest survey shows FCI down 5.4% QoQ and ICI down 8% QoQ, driven by weaker M&A optimism, tighter liquidity, higher borrowing costs, and reduced risk appetite. India recorded steeper declines in FCI (by 5.4%) and ICI (by 8%) compared to the global declines in the indices, which dipped by 2% and 3%, respectively. A sustained decline in optimism on operating margins since Q1 2025, likely signals that businesses plan to slow hiring, tighten working capital, extend supplier terms, and defer long-term investments in Q4. This reflects a prudent near-term stance, even as structural reforms and AI investments provide medium-term growth tailwinds.

Key findings from the survey:

• Investment Confidence Index (ICI) declined 8% QoQ, the sharpest drop in eight quarters, signalling heightened caution on new and expansion of existing investments.
• Business risk appetite weakened QoQ, reflecting expectations of tighter liquidity (–11%) and higher borrowing costs (–7%).
• Optimism among India’s small businesses to raise long-term funds has declined by 17% QoQ for Q4 FY25, driven by seeming expectations of tighter credit conditions.
• Among nine sub-sectors from services sector, construction, real estate, and wholesale/retail trade saw the steepest declines in both ICI and FCI.
• India’s medium-sized businesses reported a steep ICI decline (–24%, QoQ), contrasting with a slight uptick among its global counterparts (+1%), signalling heightened domestic caution.
• The 4% QoQ drop in hiring optimism, alongside weakening CapEx sentiment (-7% QoQ) suggests businesses are likely to take a cautious approach to workforce growth amid investment uncertainty.
• Optimism for raising capital is expected to remain weak, down 9% QoQ, alongside softer sentiment on short-term funds (–7%) and borrowing costs (–7%), signalling constrained investment capacity.

Commenting on the findings of the survey, Dr. Arun Singh, Global Chief Economist, Dun & Bradstreet, said, “Indian businesses are adopting a more cautious stance in Q4 2025, as reflected in the sharp 8% drop in investment confidence alongside a 5.4% decline in financial confidence. While near–term strategies focus on prudence, slowing hiring and deferring long–term investments, the medium–term outlook remains constructive, supported by structural reforms and significant AI infrastructure commitments that will help strengthen India’s digital capacity and growth 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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