The Confederation of Indian Industry (CII) on Sunday proposed a five-point industry action plan to help India navigate the ongoing West Asia crisis. The industry body backed a phased rollback of the Centre's excise duty cuts on petrol and diesel as private sector investment surged sharply across sectors.

The CII said India's private capital expenditure rose 67 per cent year-on-year to Rs 7.7 lakh crore in September 2025 from Rs 4.6 lakh crore a year earlier, calling it the clearest sign yet of a broad-based revival in the country’s investment cycle.

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Rollback Fuel Excise Cuts

The proposals include a phased withdrawal of fuel excise cuts over six to nine months, a voluntary industry energy conservation drive, a 45-day MSME payment guarantee, deeper supply-chain localisation and front-loading of private investments alongside price restraint.

The body said the Rs 10-per-litre excise duty reduction on petrol and diesel should be rolled back gradually as global crude oil prices stabilise. It also urged companies to commit to reducing fuel and power consumption by 3 to 5 per cent over the next two quarters through measures such as logistics optimisation, fleet electrification and increased renewable energy use.

As part of its five-point agenda during the ongoing West Asia crisis, the India Inc body proposed that larger corporates voluntarily guarantee payments to MSMEs within 45 days using the TReDS platform and supply-chain finance mechanisms to ease working capital stress during global volatility.

The plan also called for strategic inventory buffers, diversified sourcing and greater domestic value addition in sectors such as speciality chemicals, components and capital goods.

The CII further urged industry to accelerate FY27 investments in manufacturing, energy transition and digital infrastructure while exercising "voluntary price restraint" on essential inputs and expanding internship hiring under the PM Internship Scheme.

"The 67 per cent jump in private capex to Rs 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.

Manufacturing, Services Drive Investment Revival

According to CII’s analysis of nearly 1,200 companies from the CMIE Prowess database, manufacturing accounted for Rs 3.8 lakh crore of the total private capex, led by metals, automobiles and chemicals. Services contributed Rs 3.1 lakh crore, driven by trading, communications and IT/ITeS.

"Manufacturing has committed close to Rs 3.8 lakh crore, led by metals, automobiles and chemicals, while services have put in Rs 3.1 lakh crore led by trading, communications and IT/ITeS," Banerjee said.

Capacity utilisation in manufacturing firms rose to 75.6 per cent in the third quarter of FY26 from 74.3 per cent in the previous quarter, while 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.

Banerjee said the industry was prepared to shoulder part of the burden during the current phase of global uncertainty. "Taken together, these five suggestions could add up to the industry’s concrete partnership offer to the Government in recent memory," he said. "Combined with deeper supply-chain ringfencing, a front-loading of FY27 investments and a scale-up of internship intake under the PMIS, this is the industry’s way of saying that we will lean in, not pull back, at this defining moment for the Indian economy."

CII credited the government's policy framework and public capital expenditure push for creating the conditions for the current investment revival. It cited measures including GST reforms, PM Gati Shakti, Production Linked Incentive schemes, labour codes, free trade agreements and the PM Internship Scheme as key drivers of investor confidence.

It also pointed to strong macroeconomic indicators, including average GDP growth of 7.3 per cent over the past three years, easing inflation, forex reserves above $700 billion and exports touching a record $863 billion in FY26. "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."

CII said spillover risks from the West Asia crisis continued to pose near-term challenges, but added that stronger industry-government coordination would help protect growth momentum and economic stability.