CODE RED!

India Inc's business confidence, as measured by the BT-C Fore Business Confidence Survey, plunged to a 15-quarter low in Q4FY25, reflecting fear over US President Donald Trump's trade war

- SURABHI

THE YEAR 2025 has brought grave tidings for the global economy as US President Donald Trump unleashed a trade war, pushing effective tariff rates higher than at any time in the last half century.

This tumult has triggered concerns of a possible slowdown in demand in the US anda possible recession. Asa result, business sentiment has nosedived across the world, equity markets have tumbled, and global growth prospects have dimmed.

India Inc has caught the chills and business confidence has plunged. This was reflected in the BT-C Fore Business Confidence Survey of 500 chief executive officers (CEOs) and chief financial officers (CFOs) for the March quarter of financial year 2024-25 (Q4FY25). The Business Confidence Index (BCI) dipped below 50 for the first time since 2021, when the Covid-19 pandemic was at its peak.

The BCI fell to a 15-quarter low of 47.7 in Q4FY25, its lowest level since Q1FY22, when it hit 43.2. Business confidence had recovered in fits and starts since then as economic activities normalised post the lockdowns and sd at 53.8 in Q3FY25.

A reading of less than 50 is below average, given that the BCI is ona scale of 100, and could indicate severe stress for businesses. To put things in perspective, the BCI has registered a reading of less than 50 many times in the past, including a prolonged period from Q4FY19 to Q3F Y22. But the current reading comes at a time when there is sobering data all around. In April, the International Monetary Fund trimmed the global growth forecast for 2025 to 2.8% and 3% for 2026. It also cut India’s GDP growth forecast to 6.2% this fiscal from its previous estimate of 6.5%.