The MNI India Business Sentiment Indicator, a gauge of current sentiment among BSE-listed companies, rose by 7.7 percent to 67.1 in June from the erstwhile 62.3 in May.
In the monthly business poll, which is conducted among executives from manufacturing, service, construction and agricultural firms, it was revealed that the interest rate cut in early June has boosted business confidence.
In a statement, the company, Deutsche Borse Group, which conducts the research said although the previous rate cuts from India's apex bank have provided short-term boosts, the magnitude of this month's business confidence increase suggests "the aggregate easing to date is starting to have a positive impact".
"Firms reported increased access to credit and many reported that they were benefiting from lower interest rate costs," it said.
According to the firm, production, new orders and export orders improved significantly in June.
"Having acted as a dampener on sentiment for months, there was finally an up-tick in demand from abroad with the Export Orders Indicator rising by 13.2 percent on the month. Companies also anticipated that the weaker rupee would help support external demand over the coming months", it said.
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The anticipation helped underpin new orders, which jumped 8.2 percent to 61.8, the highest level since November 2014.
The index for production also rose by 6.3 percent to 61.1 in the month.
"The improvement in both output and demand measures bubbled through to the labour market. More companies thought the size of their workforce was insufficient for their requirements and they were also more optimistic about hiring in the coming three months", the research said.
Last month, the MNI India Business Sentiment Indicator had fallen by 2.5 percent to 62.3 compared to 63.9 in April this year.