India’s Private Capex Surges 67% to ₹7.7 Lakh Crore, Signals Strong Revival in Investment Cycle

India’s private investment cycle appears to have entered a stronger expansion phase, with private capital expenditure rising 67% year-on-year to ₹7.7 lakh crore in September 2025, compared with ₹4.6 lakh crore a year earlier, according to the Confederation of Indian Industry. DD News reported that CII described the jump as one of the clearest signs yet of a broad-based revival in the country’s investment cycle.

The industry body’s assessment was based on an analysis of nearly 1,200 companies from the CMIE Prowess database. The data showed that manufacturing led the private capex recovery, accounting for around ₹3.8 lakh crore, nearly half of total private investment. Metals, automobiles and chemicals were among the major sectors driving the manufacturing-led expansion.

The services sector also made a major contribution, with investment of about ₹3.1 lakh crore, or nearly 40% of total private capex. Trading, communications and IT-enabled services were among the key segments behind the services-sector push. This indicates that the investment revival is not limited to factories and heavy industry alone, but is also spreading across modern services and digital-linked business activity.

CII Director General Chandrajit Banerjee said the 67% rise in private capex was the strongest signal so far that India’s investment cycle had “decisively turned.” The trend is also supported by improving industrial indicators. Capacity utilisation rose to 75.6% in Q3 FY26, compared with 74.3% in the previous quarter, while new order books grew 10.3% year-on-year. Bank credit growth also strengthened, averaging nearly 14% in the second half of FY26, compared with about 10% in the first half.

Alongside the capex data, CII unveiled a five-point action agenda to support the economy amid the ongoing West Asia crisis and wider global uncertainty. The first major recommendation was a phased rollback of the ₹10 per litre central excise cut on petrol and diesel over six to nine months, provided crude prices stabilise. CII argued that a calibrated restoration would ease pressure on the exchequer without badly hurting consumer sentiment.

The second proposal focused on energy conservation. CII suggested a voluntary industry compact under which member companies would commit to reducing fuel and power consumption by 3% to 5% over the next two quarters through process optimisation, better logistics, fleet electrification and renewable power purchase agreements.

The third major recommendation was aimed at easing pressure on small businesses. CII proposed a 45-day MSME payment guarantee, backed by the TReDS platform and supply-chain finance, to reduce working-capital stress for small enterprises during periods of volatility. This is significant because delayed payments remain one of the biggest structural problems faced by MSMEs in India.

CII also called for stronger supply-chain resilience through diversified sourcing, strategic inventory buffers and deeper domestic value addition in components, specialty chemicals and capital goods. The fifth element of the agenda focused on front-loading FY27 investments in manufacturing, energy transition and digital infrastructure, along with voluntary price restraint and a higher internship intake under the Prime Minister’s Internship Scheme.

The industry body credited the government’s sustained public capex, fiscal discipline, modernised tax structure, production-linked incentive schemes and free trade agreements for creating an enabling environment for private investment. CII said the next task for industry is to convert this policy support into capacity creation, jobs, exports and domestic value addition at scale.

CII expects India’s real GDP growth to exceed 7.6% in FY26, while exports are projected to touch an all-time high of $863 billion and foreign exchange reserves are expected to remain above $700 billion. If the private capex momentum sustains, it could strengthen India’s medium-term growth cycle by combining public infrastructure spending with rising corporate investment, stronger manufacturing capacity and deeper domestic supply chains.

Source:

https://ddnews.gov.in/en/indias-private-capex-jumps-67-to-rs-7-7-lakh-crore-in-sept-2025-cii-unveils-five-point-action-plan/