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Key Points

India's business inflation expectations have ticked up slightly in July, according to the IIM Ahmedabad survey. Firms are anticipating a moderate cost increase of 4.17%, which is a marginal rise from the previous month. The survey reveals improved profit and sales expectations among businesses. Industrial growth has also shown promising signs, reaching a four-month high of 3.5% in July.

Key Points: IIM Survey Reveals Business Inflation Expectations Rise to 4.17%

  • Business inflation expectations climb 20 basis points to 4.17%
  • Firms report moderate cost pressures and increased profit expectations
  • Manufacturing sector shows positive outlook with rising industrial growth
  • Survey indicates stabilization of inflation expectations over 12 months
2 min read

Business inflation expectations tick up to 4.17 pc in July, profit expectations rise: Report

IIM Ahmedabad's Business Inflation Expectations Survey shows firms anticipate moderate cost increases and stable profit outlook for next year.

"The uncertainty of business inflation expectations has increased - BIES Survey Report"

New Delhi, Sep 8

Business inflation expectations in India for the next year have increased in July, with firms anticipating a cost rise of 4.17 per cent, up 20 basis points from June's 3.97 per cent, a report said on Monday.

The survey, namely Business Inflation Expectations Survey (BIES) done by IIM Ahmedabad measured "one year ahead business inflation expectation, as estimated from the mean of individual probability distribution of unit cost increase," said in its statement.

The percentage of firms reporting 'about normal' profit expectations in July has increased to 31 per cent from 28 per cent reported in June survey.

The survey primarily of manufacturing firms on cost, sales, and profit outlook showed that inflation expectations may have stabilised, with the 12-month average remaining at 4.19 per cent.

"The uncertainty of business inflation expectations in July, as captured by the square root of the average variance of the individual probability distribution of unit cost increase, has increased to 1.94 per cent from 1.86 per cent reported in June," the statement read.

It seems firms' inflation expectation has bottomed out, the report noted.

In July, 26 per cent of firms reported a moderate increase in costs of 3.1 to 6 per cent, up from 22 per cent in June. Overall, the cost perceptions data in July indicate moderate increase in cost pressures.

Over 60 per cent of respondents reported 'somewhat less than normal' or lower profit expectations during June-July 2025, the statement read.

In July, the percentage of firms reporting "about normal" sales increased to 26 per cent, up from 24 per cent in June. BIES is a monthly survey aimed at assessing inflation expectations of businesses and complements other macro data required for policy making. The majority of the responses of this round were received during the second half of August 2025, the report noted.

Analysts have said that the GST rate cuts on capital goods and industrial inputs will bring down manufacturing costs.

India's industrial growth, based on the Index of Industrial Production (IIP), rose to a four-month high of 3.5 per cent in July, driven by a strong performance in the manufacturing sector, according to latest data from the government. The industrial growth rate has accelerated in July from 1.5 per cent in June.

- IANS

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Reader Comments

P
Priya S
Good to see manufacturing growth picking up to 3.5%! This shows our industrial sector is recovering well. The profit expectations improvement from 28% to 31% is a positive sign for the economy.
A
Arjun K
While the numbers look moderate, the uncertainty increasing from 1.86% to 1.94% is concerning. Businesses need more stability to plan investments. Government should focus on policy consistency.
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Sarah B
Interesting data! The fact that over 60% of firms still report lower than normal profits despite improved sales shows there's a gap between revenue growth and actual profitability. Cost management remains key.
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Vikram M
The jump from 1.5% to 3.5% in IIP is impressive! Manufacturing sector is finally showing some strength. Hope this momentum continues in the festival season 🎉
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Michael C
As someone working in the manufacturing sector, I can confirm that cost pressures are real. However, the GST cuts on capital goods should help in the medium term. Need to see how quickly these benefits reach the ground level.

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