FICCI Survey indicates improvement in BCI

The latest round of FICCI’s Business Confidence Survey reported improved optimism
among members of India Inc. The Overall Business Confidence Index surged to 70.9 in
the current round, marking a substantial improvement from the 66.9 recorded in the
previous survey round. This upswing was bolstered by improvement in both current
conditions and future expectations indices, which climbed to 67.7 and 72.5 respectively
in the present round as compared to 63.4 and 68.6 reported in the previousround. This
improvement in business sentiment, both for the current situation and the nearterm
outlook, is mirrored across all three levels: the economy, industry, and individual firms.
Key operational parameters such as sales, profits, and investments reflect optimism
with regard to the near-term outlook. However, exports and employment prospects
indicate a subdued outlook. In the latest survey round, a majority 69% of the surveyed
companies anticipated an uptick in sales over the coming six months, compared to 53%
of respondents who held similar expectations in the previous round.
Only about 5% of participants expected lower sales, while 26% anticipated no change.
For investments and profits, a marginal improvement was noted in ‘higher to much
higher category’. While 51% of respondents expected increase in investments in the
present round vis-à-vis 49% in previous, the corresponding number of respondents for
profits are 38% and 34%. On the worrisome side, due to global headwinds, the outlook
for exports remained subdued with 36% of respondents citing 'higher to much higher'
levels in the present round, compared to 40% stating likewise in the previous round.
Additionally, approximately 36% of respondents anticipated hiring new employees over the next six months in the latest survey, a decline compared to 41% of participating
companies stating the same in the previous round.
The current geopolitical landscape is rife with conflicts, including the Red Sea crisis.
Participants were surveyed to assess its impact on their businesses. About 55%
respondents reported varying degrees of impact of the crisis, ranging from moderate to
severe, citing challenges such as increased voyage times, higher freight costs, delaysin
sourcing raw materials, and reduced exports. Further, in terms of strategies to bolster
trade resilience in the face of future adversities, suggestions from the respondents
included: strengthening maritime security, expediting customs procedures, fostering a
resilient internal market, and maintaining buffer stocks.
Medium-term strategies involve enhancing risk management, allocating more funds to
schemes like RDTEP, and diversifying trade routes while reducing reliance on the Bab-
el-Mandeb Strait. The intensifying reality of global warming and its rapid repercussions
on climate change have stirred widespread concern. Against this backdrop, businesses
were asked to share the sustainability practices they are integrating into their operations.
Common practices adopted across sectors included investment in rainwater harvesting
infrastructure, plastic waste management, increased utilization of renewable energy,
carbon capture and storage, recycling initiatives, afforestation efforts and adoption of
industry 4.0 technology.