India’s private sector capital expenditure jumped 67% year on year to Rs 7.7 lakh crore in September 2025 from Rs 4.6 lakh crore a year earlier, according to Confederation of Indian Industry. CII called it the strongest evidence yet of a broad based revival in India’s investment cycle.
The industry body analysed nearly 1,200 companies from the CMIE Prowess database. Investment was measured through annual changes in net fixed assets and capital work in progress across sectors.
Manufacturing emerged as the biggest contributor with Rs 3.8 lakh crore in investments, accounting for nearly half of total private capex. Metals, automobiles and chemicals companies led the manufacturing push.
The services sector added around Rs 3.1 lakh crore, or nearly 40% of total investments. Trading, communications, IT and ITeS companies were the key growth drivers.
CII Director General Chandrajit Banerjee said the scale and spread of investments show India’s private investment cycle has “decisively turned” after more than a decade of weak private sector spending.
CII said manufacturing capacity utilisation increased to 75.6% in Q3 FY26 from 74.3% in the previous quarter. New order books also grew 10.3% year on year, reflecting stronger industrial demand.
Bank credit growth rebounded sharply as well. Credit growth averaged close to 14% in the second half of FY26 compared with around 10% in the first half, showing rising business borrowing and expansion activity.
Alongside the investment data, CII released a five point industry action agenda to help the economy manage risks from the ongoing West Asia crisis and global volatility.
One key proposal was a phased rollback of the Rs 10 per litre central excise duty cut on petrol and diesel over six to nine months if crude oil prices stabilise. CII said the rollback would reduce pressure on government finances without hurting consumer demand.
CII also said companies should voluntarily absorb part of rising input costs instead of fully passing them on to consumers. Banerjee said industry is prepared to absorb a meaningful share of cost pressures within margins.
The industry body proposed a voluntary energy conservation compact where member companies would reduce fuel and power consumption by 3% to 5% over the next two quarters through process optimisation, efficient logistics, fleet electrification and faster renewable energy adoption.
CII further recommended a voluntary 45 day MSME payment guarantee backed by wider use of the TReDS platform and supply chain finance to ease working capital stress faced by smaller businesses during volatile conditions.
The organisation also pushed for stronger supply chain ring fencing through diversified sourcing, strategic inventory buffers and deeper domestic value addition in components, specialty chemicals and capital goods to reduce external dependence.
CII urged companies to front load FY27 investments in manufacturing, energy transition and digital infrastructure. It also called for voluntary price restraint on essential inputs and higher internship hiring under the Prime Minister Internship Scheme over the next year.
The industry body credited the government’s policy framework for supporting the recovery. It highlighted sustained public capital expenditure, GST reforms, fiscal consolidation, PLI schemes, PM Gati Shakti, labour codes and trade agreements with the EU, UK, UAE, Australia and EFTA.
CII noted that India’s real GDP growth averaged 7.3% over the last three years and is expected to exceed 7.6% in FY26. It also said exports touched a record $863 billion in FY26, foreign exchange reserves crossed $700 billion and the fiscal deficit narrowed to 4.5% of GDP in FY25 from the pandemic peak of 9.2%.
Banerjee said the credit for the turnaround belongs to the government, adding that industry must now convert the strong policy environment into large scale investments, jobs, exports and domestic value addition.
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