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What is the story about?
Private sector capital expenditure rose 67% year-on-year to ₹7.7 lakh crore in September 2025 from ₹4.6 lakh crore a year earlier, according to the Confederation of Indian Industry (CII), which said the data points to a broad-based recovery in India’s investment cycle.
CII also unveiled a five-point industry action plan during the ongoing West Asia crisis. The proposals include a phased rollback of the Centre’s fuel excise cut, voluntary energy-saving measures by companies, faster payments to MSMEs, supply-chain strengthening and front-loading of private investments.
The industry body analysed nearly 1,200 companies using the CMIE Prowess database. It measured private investment through annual changes in net fixed assets and capital work in progress.
Manufacturing accounted for ₹3.8 lakh crore, or nearly half of the total private capex, led by metals, automobiles and chemicals. Services contributed ₹3.1 lakh crore, driven by trading, communications and IT/ITeS.
Credit picks up
CII said other economic indicators also showed improving business activity.
Manufacturing capacity utilisation rose to 75.6% in Q3FY26 from 74.3% in the previous quarter. New order books grew 10.3% year-on-year, while bank credit growth averaged close to 14% in the second half of FY26, compared with around 10% in the first half.
“The 67 per cent jump in private capex to ₹7.7 lakh crore is, by some distance, the most important signal yet that India’s investment cycle has decisively turned,” said Chandrajit Banerjee, Director General, CII.
He said manufacturing investments were led by metals, automobiles and chemicals, while services investments were driven by trading, communications and IT/ITeS.
“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 added.
Excise rollback
As part of its five-point agenda, CII proposed a phased rollback of the ₹10 per litre central excise cut on petrol and diesel over six to nine months as crude oil 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.
CII also asked member companies to voluntarily reduce fuel and power consumption by 3-5% over the next two quarters through process optimisation, efficient logistics, fleet electrification and renewable energy purchases.
The industry body proposed a voluntary 45-day MSME payment guarantee backed by greater use of the TReDS platform and supply-chain finance to reduce working capital pressure on smaller businesses.
It also called for supply-chain “ringfencing” through diversified sourcing, inventory buffers and alternative global partnerships, along with greater domestic value addition in components, speciality chemicals and capital goods.
FY27 capex push
CII further proposed front-loading FY27 private investments in manufacturing, energy transition and digital infrastructure. It also urged companies to exercise voluntary price restraint on essential inputs and increase internship intake under the PM Internship Scheme over the next 12 months.
The industry body credited the government’s policy framework and public capital expenditure push for supporting the investment revival.
CII cited measures such as GST reforms, Jan Vishwas 2.0, PM Gati Shakti, Production Linked Incentive schemes, labour codes, renewable energy targets, trade agreements with the EU, UK, UAE, Australia and EFTA, and the rollout of the National Education Policy 2020 and PM Internship Scheme as factors that improved the business environment.
According to CII, India’s real GDP growth averaged 7.3% over the past three years and is expected to exceed 7.6% in FY26. It also noted that inflation remained within the RBI’s tolerance band, the fiscal deficit narrowed to 4.5% of GDP in FY25 from 9.2% during the pandemic period, exports hit a record $863 billion in FY26, forex reserves crossed $700 billion and S&P reaffirmed India’s sovereign rating.
“The credit for this turnaround belongs squarely to the Government,” Banerjee said. “Industry’s task now is to convert this enabling environment into committed capacity, jobs, exports and value addition at scale,” he added.
CII said that while India remains relatively insulated from global shocks, spillover risks from the West Asia crisis could still affect the economy in the near term.
It said closer coordination between industry and government would be important to protect growth, consumers and public finances while advancing the goal of Viksit Bharat by 2047.
CII also unveiled a five-point industry action plan during the ongoing West Asia crisis. The proposals include a phased rollback of the Centre’s fuel excise cut, voluntary energy-saving measures by companies, faster payments to MSMEs, supply-chain strengthening and front-loading of private investments.
The industry body analysed nearly 1,200 companies using the CMIE Prowess database. It measured private investment through annual changes in net fixed assets and capital work in progress.
Manufacturing accounted for ₹3.8 lakh crore, or nearly half of the total private capex, led by metals, automobiles and chemicals. Services contributed ₹3.1 lakh crore, driven by trading, communications and IT/ITeS.
Credit picks up
CII said other economic indicators also showed improving business activity.
Manufacturing capacity utilisation rose to 75.6% in Q3FY26 from 74.3% in the previous quarter. New order books grew 10.3% year-on-year, while bank credit growth averaged close to 14% in the second half of FY26, compared with around 10% in the first half.
“The 67 per cent jump in private capex to ₹7.7 lakh crore is, by some distance, the most important signal yet that India’s investment cycle has decisively turned,” said Chandrajit Banerjee, Director General, CII.
He said manufacturing investments were led by metals, automobiles and chemicals, while services investments were driven by trading, communications and IT/ITeS.
“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 added.
Excise rollback
As part of its five-point agenda, CII proposed a phased rollback of the ₹10 per litre central excise cut on petrol and diesel over six to nine months as crude oil 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.
CII also asked member companies to voluntarily reduce fuel and power consumption by 3-5% over the next two quarters through process optimisation, efficient logistics, fleet electrification and renewable energy purchases.
The industry body proposed a voluntary 45-day MSME payment guarantee backed by greater use of the TReDS platform and supply-chain finance to reduce working capital pressure on smaller businesses.
It also called for supply-chain “ringfencing” through diversified sourcing, inventory buffers and alternative global partnerships, along with greater domestic value addition in components, speciality chemicals and capital goods.
FY27 capex push
CII further proposed front-loading FY27 private investments in manufacturing, energy transition and digital infrastructure. It also urged companies to exercise voluntary price restraint on essential inputs and increase internship intake under the PM Internship Scheme over the next 12 months.
The industry body credited the government’s policy framework and public capital expenditure push for supporting the investment revival.
CII cited measures such as GST reforms, Jan Vishwas 2.0, PM Gati Shakti, Production Linked Incentive schemes, labour codes, renewable energy targets, trade agreements with the EU, UK, UAE, Australia and EFTA, and the rollout of the National Education Policy 2020 and PM Internship Scheme as factors that improved the business environment.
According to CII, India’s real GDP growth averaged 7.3% over the past three years and is expected to exceed 7.6% in FY26. It also noted that inflation remained within the RBI’s tolerance band, the fiscal deficit narrowed to 4.5% of GDP in FY25 from 9.2% during the pandemic period, exports hit a record $863 billion in FY26, forex reserves crossed $700 billion and S&P reaffirmed India’s sovereign rating.
“The credit for this turnaround belongs squarely to the Government,” Banerjee said. “Industry’s task now is to convert this enabling environment into committed capacity, jobs, exports and value addition at scale,” he added.
CII said that while India remains relatively insulated from global shocks, spillover risks from the West Asia crisis could still affect the economy in the near term.
It said closer coordination between industry and government would be important to protect growth, consumers and public finances while advancing the goal of Viksit Bharat by 2047.
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