Private Investment in India Projected to Exceed Rs 2.67 Lakh Crore by 2026

Private corporate investment in India is anticipated to surpass Rs 2.67 lakh crore in the fiscal year 2025-26, a notable increase from Rs 2.2 lakh crore projected for 2024-25. This growth is attributed to several favorable macroeconomic factors, including improved balance sheets, rising capacity utilization, and a supportive liquidity environment. The information was detailed in the latest monthly bulletin from the Reserve Bank of India.

India’s investment climate has experienced a resurgence following a period of subdued activity during the pandemic. The investment cycle is being revitalized by a combination of solid economic fundamentals. The country is on track to achieve a real GDP growth rate of 6.5 percent in 2024-25, making it the fastest-growing major economy globally. This growth is supported by robust domestic demand and ongoing public infrastructure projects.

Factors Driving Investment Growth

Recent improvements in the credit environment have played a crucial role in encouraging corporate investments. The banking sector has witnessed enhanced asset quality and abundant liquidity, leading to easier access to financing for capacity expansion. In addition, Indian corporations have focused on balance sheet repair, which has resulted in improved cash flows and strong profitability across various sectors.

Indicators such as increased imports of capital goods and a rise in corporate bond market activity reflect a renewed appetite for investment among firms. Specific government policies, such as the Production-Linked Incentive (PLI) schemes and investments in energy transition and digital infrastructure, are providing additional incentives for corporates to pursue new projects.

Investment in greenfield projects, which accounted for approximately 92 percent of the total cost of projects financed by banks and financial institutions during 2024-25, highlights a strong trend towards capacity expansion. Greenfield investments typically introduce new resources and assets into the market, leading to significant gross fixed capital formation.

Sectoral Distribution of Investments

The distribution of investments reveals that the infrastructure sector remains dominant, accounting for over 50.6 percent of the total project costs. Notably, investments in the power sector and road infrastructure have driven this growth. Other significant sectors include chemicals and pesticides, construction, electrical equipment, and metal products, all contributing to the overall investment landscape.

The positive trajectory of private corporate investment is essential for India’s long-term economic growth. With a variety of supportive factors at play, the outlook for the coming years appears promising, positioning India as a key player in the global economy.