diff --git a/src/services/code-index/constants/index.ts b/src/services/code-index/constants/index.ts
index 6f0e0fe7e6..17b02f7dad 100644
--- a/src/services/code-index/constants/index.ts
+++ b/src/services/code-index/constants/index.ts
@@ -16,16 +16,16 @@ export const MAX_FILE_SIZE_BYTES = 1 * 1024 * 1024 // 1MB
 
 /**Directory Scanner */
 export const MAX_LIST_FILES_LIMIT_CODE_INDEX = 50_000
-export const BATCH_SEGMENT_THRESHOLD = 60 // Number of code segments to batch for embeddings/upserts
+export const BATCH_SEGMENT_THRESHOLD = 200 // Number of code segments to batch for embeddings/upserts - increased from 60 for better performance
 export const MAX_BATCH_RETRIES = 3
 export const INITIAL_RETRY_DELAY_MS = 500
-export const PARSING_CONCURRENCY = 10
-export const MAX_PENDING_BATCHES = 20 // Maximum number of batches to accumulate before waiting
+export const PARSING_CONCURRENCY = 20 // Increased from 10 for faster parallel file parsing
+export const MAX_PENDING_BATCHES = 30 // Maximum number of batches to accumulate before waiting - increased from 20
 
 /**OpenAI Embedder */
 export const MAX_BATCH_TOKENS = 100000
 export const MAX_ITEM_TOKENS = 8191
-export const BATCH_PROCESSING_CONCURRENCY = 10
+export const BATCH_PROCESSING_CONCURRENCY = 15 // Increased from 10 for better throughput
 
 /**Gemini Embedder */
 export const GEMINI_MAX_ITEM_TOKENS = 2048
diff --git a/src/services/code-index/orchestrator.ts b/src/services/code-index/orchestrator.ts
index fbc4a24118..df9883d1c1 100644
--- a/src/services/code-index/orchestrator.ts
+++ b/src/services/code-index/orchestrator.ts
@@ -139,11 +139,23 @@ export class CodeIndexOrchestrator {
 			const handleFileParsed = (fileBlockCount: number) => {
 				cumulativeBlocksFoundSoFar += fileBlockCount
 				this.stateManager.reportBlockIndexingProgress(cumulativeBlocksIndexed, cumulativeBlocksFoundSoFar)
+
+				// Add progress percentage to status message
+				if (cumulativeBlocksFoundSoFar > 0) {
+					const progressPercent = Math.round((cumulativeBlocksIndexed / cumulativeBlocksFoundSoFar) * 100)
+					this.stateManager.setSystemState("Indexing", `Indexing workspace... (${progressPercent}% complete)`)
+				}
 			}
 
 			const handleBlocksIndexed = (indexedCount: number) => {
 				cumulativeBlocksIndexed += indexedCount
 				this.stateManager.reportBlockIndexingProgress(cumulativeBlocksIndexed, cumulativeBlocksFoundSoFar)
+
+				// Add progress percentage to status message
+				if (cumulativeBlocksFoundSoFar > 0) {
+					const progressPercent = Math.round((cumulativeBlocksIndexed / cumulativeBlocksFoundSoFar) * 100)
+					this.stateManager.setSystemState("Indexing", `Indexing workspace... (${progressPercent}% complete)`)
+				}
 			}
 
 			const result = await this.scanner.scanDirectory(
diff --git a/src/services/code-index/processors/scanner.ts b/src/services/code-index/processors/scanner.ts
index 27362b8b74..362fc86da6 100644
--- a/src/services/code-index/processors/scanner.ts
+++ b/src/services/code-index/processors/scanner.ts
@@ -89,6 +89,74 @@ export class DirectoryScanner implements IDirectoryScanner {
 		let processedCount = 0
 		let skippedCount = 0
 
+		// Early termination check: if all files are already indexed, skip processing
+		let allFilesUnchanged = true
+		let quickCheckCount = 0
+		const quickCheckLimit = Math.min(10, supportedPaths.length) // Check first 10 files for quick assessment
+
+		for (const filePath of supportedPaths.slice(0, quickCheckLimit)) {
+			try {
+				const stats = await stat(filePath)
+				if (stats.size <= MAX_FILE_SIZE_BYTES) {
+					const content = await vscode.workspace.fs
+						.readFile(vscode.Uri.file(filePath))
+						.then((buffer) => Buffer.from(buffer).toString("utf-8"))
+					const currentFileHash = createHash("sha256").update(content).digest("hex")
+					const cachedFileHash = this.cacheManager.getHash(filePath)
+
+					if (cachedFileHash !== currentFileHash) {
+						allFilesUnchanged = false
+						break
+					}
+				}
+				quickCheckCount++
+			} catch (error) {
+				// If we can't check a file, assume it might have changed
+				allFilesUnchanged = false
+				break
+			}
+		}
+
+		// If quick check shows all sampled files are unchanged and we checked a reasonable sample,
+		// do a full check to confirm
+		if (allFilesUnchanged && quickCheckCount === quickCheckLimit && supportedPaths.length > quickCheckLimit) {
+			console.log(`[DirectoryScanner] Quick check passed, verifying all ${supportedPaths.length} files...`)
+			for (const filePath of supportedPaths.slice(quickCheckLimit)) {
+				try {
+					const stats = await stat(filePath)
+					if (stats.size <= MAX_FILE_SIZE_BYTES) {
+						const content = await vscode.workspace.fs
+							.readFile(vscode.Uri.file(filePath))
+							.then((buffer) => Buffer.from(buffer).toString("utf-8"))
+						const currentFileHash = createHash("sha256").update(content).digest("hex")
+						const cachedFileHash = this.cacheManager.getHash(filePath)
+
+						if (cachedFileHash !== currentFileHash) {
+							allFilesUnchanged = false
+							break
+						}
+					}
+				} catch (error) {
+					allFilesUnchanged = false
+					break
+				}
+			}
+		}
+
+		// If all files are unchanged, we can skip the entire indexing process
+		if (allFilesUnchanged && supportedPaths.length > 0) {
+			console.log(
+				`[DirectoryScanner] All ${supportedPaths.length} files are already indexed and unchanged. Skipping indexing.`,
+			)
+			return {
+				stats: {
+					processed: 0,
+					skipped: supportedPaths.length,
+				},
+				totalBlockCount: 0,
+			}
+		}
+
 		// Initialize parallel processing tools
 		const parseLimiter = pLimit(PARSING_CONCURRENCY) // Concurrency for file parsing
 		const batchLimiter = pLimit(BATCH_PROCESSING_CONCURRENCY) // Concurrency for batch processing