Capital expenditure by the private sector rose by an impressive 67 percent in the first half of fiscal year 2025-26 (FY26), according to the Confederation of Indian Industries (CII), which released its findings on Sunday. The report also proposed a five-point action plan aimed at enhancing private sector performance and accountability in light of the ongoing West Asia crisis.
CII analyzed data from 1,200 companies and reported that private sector investment, defined as the annual change in net fixed assets and capital work in progress, reached ₹7.7 lakh crore in September 2025. This figure marks a significant increase from ₹4.6 lakh crore the previous year. Manufacturing led this surge, contributing ₹3.8 lakh crore—nearly half of the total private capital expenditure—with major contributions from metals, automobiles, and chemicals. The services sector also played a crucial role, contributing ₹3.1 lakh crore, or about 40 percent, largely driven by trading, communications, and IT/ITeS.
Chandrajit Banerjee, Director General of CII, commented on the findings, stating, “With capacity utilization rising to 75.6 percent, order books expanding at over 10 percent year-on-year, and bank credit growth near 14 percent in the second half of FY26, private enterprises are committing capital at a scale and across sectors not seen in over a decade.”
Five-Point Action Plan
In light of current global economic challenges, CII urged industry leaders to take proactive measures. The proposed five-point action plan includes:
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Phased Drawdown of Fuel Excise Cut: CII advocates for a gradual rollback of the ₹10 per litre central excise cut on petrol and diesel over six to nine months, contingent on stabilizing crude prices.
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Voluntary Industry Energy Conservation Compact: Member companies are encouraged to commit to a 3 to 5 percent reduction in fuel and power consumption over the next two quarters by optimizing processes, improving logistics, electrifying fleets, and accelerating renewable energy purchases.
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45-Day MSME Payment Guarantee: Larger corporations could consider committing to a voluntary 45-day payment guarantee for micro, small, and medium enterprises (MSMEs), utilizing the TReDS platform and supply-chain finance to alleviate working capital pressures during this volatile period.
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Supply-Chain Ringfencing and Import Substitution: CII suggests enhancing Indian supply chains through diversified sourcing, strategic inventory buffers, and partnerships with alternative geographies, along with deepening domestic value addition in components, specialty chemicals, and capital goods.
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Front-Loaded Private Capex and Internship Initiative: The industry is encouraged to accelerate investments in manufacturing, energy transition, and digital infrastructure for FY27, exercise voluntary price restraint on essential inputs, and scale up internship intakes over the next year under the PM Internship Scheme (PMIS).
Banerjee emphasized that collectively, these measures could constitute a significant partnership offer from industry to the government in recent memory. He acknowledged that while India is better insulated from external shocks than ever before, the spillover effects from the West Asia crisis present near-term risks that require attention.
The report was published on May 10, 2026.
