According to the Markit India Business Outlook, the level of confidence of Indian private companies significantly declined in February from that of four months ago.
In October 2016, 25 per cent firms were optimistic about business output.
"India bucked the general global trend of improving levels of confidence and saw business sentiment diminish in February," IHS Markit economist Pollyanna De Lima said.
This is the lowest reading of the 12 countries for which the composite outlook data are available.
"Manufacturers and service providers alike are dispirited with regard to growth prospects in the year ahead, with the latest set of gloomy outlook results showing subdued optimism concerning business activity, revenues and profitability that were among the weakest globally," Ms Lima added.
The gloomier set of numbers for incoming new business, as reflected in the hiring intention of the private sector in India, is the weakest such recruitment parameter globally. Just 6 per cent of private companies are planning to take on extra staff.
On the prices front though, inflationary forces are expected to soften.
"On balance, the fewest percentage of firms ever recorded by the survey foresee higher input costs and a similar trend was signalled for plans to raise selling prices. If materialised, lower inflation could encourage consumer spending in the year ahead," she said.
On the one hand, Indian companies expect factors such as new projects in the pipeline, strong client demand and introduction of GST as the potential growth drivers while on the other hand, competitive pressures, government policies, client defaults, and uncertainty in global markets are seen as threats to the outlook.