India’s private sector capital expenditure grew 67% to ₹7.7 lakh crore in September 2025 in comparison to September 2024, according to data sourced by the industry body Confederation of Indian Industry (CII). This comes at a time when officials in the Finance Ministry have publicly lamented that the private sector is not investing enough.

The CII also called on Indian industry to aid the economy during the ongoing West Asia crisis by cutting fuel usage over the next two quarters, providing MSMEs a payment guarantee, and front-loading their capital investment plans for the current financial year, among other steps. 

“The 67% 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,” Chandrajit Banerjee, director general of CII, said. “Manufacturing has committed close to ₹3.8 lakh crore, led by metals, automobiles and chemicals, while services have put in ₹3.1 lakh crore led by trading, communications and IT/ITeS.” 

Difference of opinion

Mr. Banerjee added that with capacity utilisation increasing to 75.6%, order books expanding at over 10% year-on-year and bank credit growth close to 14% 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”.

This data, however, is at odds with what the Central government seems to be observing. Earlier this month, Chief Economic Advisor (CEA) V. Anantha Nageswaran pulled up the private sector for not investing enough.

“Post Covid, if you look at BSE 500 or NSE 500 companies, corporate profits grew at 30.8% per annum,” Mr. Nageswaran had noted while addressing the second annual Isaac Centre for Public Policy Growth Conference organised by Ashoka University on May 2. “But still, our overall capital formation rates from the private sector have been disappointing.”

“Corporates and the second or third generation entrepreneurs chose to accumulate those cash profits and probably set up family offices elsewhere rather than investing in real assets on the ground,” the CEA had added.

Fuel-related steps

That said, CII seems to be sufficiently buoyed by the investment data to call on the Indian private sector “to step forward and shoulder its share of the national burden during the ongoing period of global stress”. Towards this, it recommended five steps that could be taken that would benefit the economy and the government’s finances.

The first step, it said, was for the ₹10 per litre Central excise cut on petrol and diesel to be progressively rolled back in tranches over six to nine months as crude prices stabilise. 

According to the Ministry of Petroleum and Natural Gas, the Centre is foregoing about ₹14,000 crore a month due to the excise duty cuts it implemented in March 2026. 

As its second step, the CII called on its member companies to commit to a 3-5% reduction in fuel and power consumption over the next two quarters through process optimisation, efficient logistics, fleet electrification and accelerated renewable power purchase agreements.

Supporting domestic players

“Larger member corporates could commit to a voluntary 45-day MSME payment guarantee, backed by aggressive use of the TReDS platform and supply-chain finance, to ease working capital pressure on small enterprises during this volatile period,” the industry body proposed as its third step.

The fourth measure Indian industry could take is to further ring-fence its supply chains and opt for deeper import substitution. 

As the fifth step, the CII called on industry to front-load FY27 investments in manufacturing, energy transition and digital infrastructure, exercise voluntary price restraint on essential inputs, and scale up internship intake over the next 12 months under the PM Internship Scheme.

“Taken together, these five suggestions could add up to industry’s concrete partnership offer to the government in recent memory,” Mr. Banerjee added.