India’s private sector capital expenditure grew 67 per cent to Rs 7,70,000 crore in September 2025 from Rs 4,60,000 crore a year earlier, offering what industry leaders described as the strongest evidence yet of a broad-based revival in the country’s investment cycle.
The Confederation of Indian Industry (CII) said the sharp rise reflects growing confidence among companies as capacity utilisation firms up, order books expand and credit growth accelerates.
“The 67 per cent jump in private capex to Rs 7,70,000 crore is, by some distance, the most important signal yet that India’s investment cycle has decisively turned,” CII Director General Chandrajit Banerjee said in a statement on Sunday.
CII’s assessment, based on an analysis of nearly 1,200 companies from the CMIE Prowess database, showed manufacturing leading the investment push with Rs 3,80,000 crore, accounting for nearly half of total private capex. Metals, automobiles and chemicals were at the forefront of manufacturing investments.
Services accounted for about Rs 3,10,000 crore, or roughly 40 per cent of the total, led by trading, communications and IT and IT-enabled services, CII said.
Manufacturing capacity utilisation rose to 75.6 per cent in the third quarter of fiscal year 2026 from 74.3 per cent in the previous quarter, while new order books expanded 10.3 per cent year on year. Bank credit growth averaged close to 14 per cent in the second half of FY26, compared with around 10 per cent in the first half.
“With capacity utilisation hardening to 75.6 per cent, order books expanding at over 10 per cent year on year and bank credit growth close to 14 per cent in the second half of FY26, private enterprise is committing capital at scale, and across sectors, in a manner not seen in well over a decade,” Banerjee said.
Alongside the data, CII unveiled a five-point action agenda aimed at supporting growth through the ongoing West Asia crisis and beyond. The proposals include a phased withdrawal of the central government’s Rs 10 per litre excise duty cut on petrol and diesel over six to nine months as crude prices stabilise.
“A calibrated phased restoration of the fuel excise will progressively relieve the exchequer of a very substantial burden without disrupting consumer sentiment,” Banerjee said, adding that industry was prepared to absorb a meaningful share of higher input costs within margins.
Other measures include a voluntary industry energy conservation compact, under which companies would target a 3-5 per cent reduction in fuel and power consumption over the next two quarters, and a 45-day payment guarantee for micro, small and medium enterprises backed by trade receivables discounting and supply-chain finance.
CII also called for deeper import substitution through diversified sourcing and higher domestic value addition in components, specialty chemicals and capital goods, as well as front-loading of FY27 investments in manufacturing, energy transition and digital infrastructure.
Banerjee credited sustained public capital expenditure, fiscal discipline, tax reforms, production-linked incentive schemes and free trade agreements covering nearly 70 per cent of global GDP for creating an enabling environment for private investment.
CII said it expects real GDP growth to exceed 7.6 per cent in FY26, with exports reaching a record USD 863 billion and foreign exchange reserves remaining above USD 700 billion, as broader indicators point to improving business activity. |
