India Inc cautious amid global headwinds: BL Survey

The survey revealed that while cost-cutting remains a concern, it is not widespread.

India Inc. is cautiously optimistic about business prospects in the year ahead, according to the businessline India Inc. Sentiment Survey 2025. A majority of the 25 corporate respondents described the sentiment in their industry as “somewhat optimistic” or “very optimistic”, signalling a tempered but positive outlook despite global uncertainties. The survey received responses from a cross-section of sectors, including auto, IT, real estate, metals and FMCG.

When asked about the potential impact of US trade policies, particularly the Trump tariff measures, most businesses expect only a moderate effect on their strategy. Fourteen respondents flagged moderate impact, while only two foresaw significant disruption.

“India is better placed than its peers, not only because of its relatively smaller exposure to US exports and smaller indicative tariff rate, but also because of affirmative signals from the US administration that a bilateral agreement between the two countries can happen soon. Therefore, we are not taking any knee-jerk decisions based on day-to-day developments,” said a senior executive of a large manufacturing company.

Investment plans

Macro headwinds are influencing investment behaviour, though not halting it. Fourteen businesses reported maintaining cautious but steady investment plans, while a smaller group is holding back or deferring new investments. Encouragingly, a few firms indicated they are planning aggressive expansion.

An article published in the latest RBI Bulletin underscored that even as global growth is set to slow down or even enter a recession in 2025, as global financial markets wager, India has emerged from the pandemic years stronger than initially thought, with a steady gathering of momentum since the second quarter of the current financial year. “Unlike the global economy, India would not slow down—it would maintain the pace of expansion achieved in 2022–23. We remain optimistic about India, whatever the odds,” the article said.

The main concern

The survey revealed that while cost-cutting remains a concern, it is not widespread. Most companies have not undertaken cuts yet; ten are monitoring the situation closely, and eight see no need to act. However, six have already implemented reductions, and three plan to do so soon. An official from the gems & jewellery industry said that the slowdown in exports and weak demand in the domestic markets will lead to job losses in the highly labour-intensive industry. Exports to the US at $11 billion a year, account for 30 per cent of India’s overall jewellery shipments.

Overall, the survey reflects a corporate sector that is watchful, wary of global turbulence, but still willing to invest and grow in the right conditions.