Capital expenditure by private sector surged by 67 per cent in the first half of fiscal year 2025-26 (FY26), industry body Confederation of Indian Industries (CII) said on Sunday. It also proposed a five points-action plan to boost private sector performance and accountability for the duration of the West Asia crisis and even beyond.
Based on an analysis of 1,200 companies, CII said that private sector investment, measured as the annual change in net fixed assets and capital work in progress, rose to ₹7.7 lakh crore in September 2025, a 67 per cent jump over ₹4.6 lakh crore a year earlier. Manufacturing led the way, accounting for ₹3.8 lakh crore or nearly half of total private capex, with metals, automobiles and chemicals at the forefront. Services contributed ₹3.1 lakh crore, or about 40 per cent, driven by trading, communications and IT/ITeS.
Calling this the most important signal yet that India’s investment cycle has decisively turned, Chandrajit Banerjee, Director General of CII, said: “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.”
5-points action plan
The industry body appealed its fraternity to step forward and shoulder its share of the national burden during the ongoing period of global stress. Accordingly, it put forth a five-points action plan. The first one prescribes phased drawdown of the fuel excise cut. “The ₹10 per litre central excise cut on petrol and diesel, taken at significant cost to the exchequer, should be progressively rolled back in tranches over six to nine months as crude prices stabilise,” it said.
The second one is about voluntary industry energy conservation compact. “Member companies may like to commit to a 3 to 5 per cent reduction in fuel and power consumption over the next two quarters through process optimisation, efficient logistics, fleet electrification and accelerated renewable power purchase agreements,” it said.
The third one suggests 45-Day MSME payment guarantee. “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,” it said.
The fourth one is related to supply-chain ringfencing and deeper import substitution. “Indian supply chains will be ringfenced through diversified sourcing, strategic inventory buffers and tie-ups with alternative geographies, alongside deeper domestic value addition in components, specialty chemicals and capital goods,” CII said.
And the fifth one suggests front-loaded private capex, voluntary price restraint and internship push. “Industry may 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 twelve months under the PMIS,” industry body said.
According to Banerjee, all these taken together, these five suggestions could add up to industry’s concrete partnership offer to the Government in recent memory. “While India remains better insulated from external shocks than ever before, spillover effects from the West Asia crisis continue to pose near-term downside risks,” he said.
Published on May 10, 2026