Private capex jumps 67% to ₹7.7 lakh crore in Sept 2025 as CII flags investment revival

India’s private capital expenditure rose 67% year-on-year to ₹7.7 lakh crore in September 2025, signalling what industry body Confederation of Indian Industry (CII) described as the strongest evidence yet of a broad-based revival in the country’s investment cycle.

The rise compares with ₹4.6 lakh crore in September 2024 and was driven by a sharp pickup in manufacturing and services investments, according to CII’s analysis of nearly 1,200 companies from the CMIE Prowess database.

Manufacturing accounted for ₹3.8 lakh crore, nearly half of total private capex, led by metals, automobiles and chemicals. Services contributed ₹3.1 lakh crore, driven by trading, communications and IT/ITeS.

CII Director General Chandrajit Banerjee said the scale and spread of investments indicated that the private investment cycle had “decisively turned”.

“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,” Banerjee said.

“With capacity utilisation hardening 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,” he added.

Complementary indicators also pointed to strengthening industrial activity. Capacity utilisation of manufacturing firms rose to 75.6% in the third quarter of FY26 from 74.3% in the previous quarter, while new order books grew 10.3% year-on-year. Bank credit growth averaged close to 14% in the second half of FY26, compared with around 10% in the first half.

Five-point industry plan

Alongside the investment data, CII unveiled a five-point action plan aimed at helping the economy navigate the ongoing West Asia crisis and related global volatility.

Among its key recommendations, the industry body backed a phased rollback of the ₹10 per litre central excise duty cut on petrol and diesel over six to nine months, provided crude oil prices stabilise.

CII also called on companies to voluntarily absorb part of the rising input costs instead of fully passing them on to consumers.

“A calibrated phased restoration of the fuel excise will progressively relieve the exchequer of a very substantial burden without disrupting consumer sentiment, and industry is prepared to absorb a meaningful share of input cost pressures within its own margins,” Banerjee said.

The proposed agenda also includes a voluntary industry energy conservation compact under which member companies would target a 3% to 5% reduction in fuel and power consumption over the next two quarters through process optimisation, efficient logistics, fleet electrification and faster adoption of renewable energy purchase agreements.

CII further proposed a voluntary 45-day MSME payment guarantee backed by wider use of the Trade Receivables Discounting System (TReDS) and supply-chain finance mechanisms to ease working capital stress among smaller enterprises.

The industry body also urged companies to deepen import substitution, diversify sourcing networks and create strategic inventory buffers to protect supply chains from global disruptions.

In addition, it called for front-loading FY27 investments in manufacturing, energy transition and digital infrastructure, while exercising voluntary price restraint on essential inputs and scaling up internship hiring under the Prime Minister Internship Scheme over the next year.

“Combined with deeper supply-chain ringfencing, a front-loading of FY27 investments and a scale-up of internship intake under the PMIS, this is industry’s way of saying that we will lean in, not pull back, at this defining moment for the Indian economy,” Banerjee said.

CII credited the government’s policy framework for creating conditions that enabled the investment recovery. It pointed to sustained public capital expenditure, fiscal consolidation, GST reforms, Production Linked Incentive schemes, PM Gati Shakti, labour codes and trade agreements with regions including the EU, UK, UAE, Australia and EFTA.

The industry body noted that India’s real GDP growth averaged 7.3% over the last three years and is expected to exceed 7.6% in FY26. It also highlighted that exports touched a record $863 billion in FY26, foreign exchange reserves crossed $700 billion and the fiscal deficit narrowed to 4.5% of GDP in FY25 from the pandemic peak of 9.2%.

“The credit for this turnaround belongs squarely to the Government,” Banerjee said, adding that industry must now translate the enabling environment into “committed capacity, jobs, exports and value addition at scale.”