India’s new capital investment commitments increased by 32 percent in the 2025-26 fiscal year (FY26), propelled primarily by a significant surge in private sector participation, according to data compiled by investment tracking firm Projects Today. Despite a notable slowdown in new investment plans during the January-March quarter, influenced by geopolitical tensions in West Asia, the overall investment landscape showed strong growth throughout the year.
Total fresh investment intentions rose to ₹58.25 trillion in FY26, up from ₹44.15 trillion in FY25. The number of new projects grew by 38 percent to 16,247 from 11,720 in the previous year. Manufacturing led the expansion, with new investment plans in the sector jumping 58.3 percent to nearly ₹17.24 trillion, bolstered by increased commitments in basic metals, chemicals, machinery, and electronics. The largest project announced was Vedanta’s ₹1.28 trillion aluminium smelter in Dhenkanal, Odisha.
Private capital expenditures accounted for over 70 percent of new investments, up from 61.23 percent in FY25. Domestic private investors’ proposed investments increased by 40.7 percent to ₹34.06 trillion, while foreign investors’ commitments more than doubled, surging 144.05 percent to ₹6.91 trillion. Government investment plans showed only modest growth, rising about 1 percent to ₹17.28 trillion. Within the public sector, states surpassed the central government with proposed outlays of nearly ₹8.67 trillion compared to the Centre’s ₹8.61 trillion.
However, the fourth quarter revealed a more cautious investment climate, as fresh commitments halved to ₹8.6 trillion amid uncertainty from global conflicts and inflationary pressures, including high oil prices. These factors are expected to influence investment trends entering FY27, particularly affecting private sector decisions on large-scale projects valued at ₹1,000 crore or more. Shashikant Hegde, CEO of Projects Today, noted that while private investment may slow and become more selective in the near term, stronger public sector capital expenditure might be necessary to sustain overall momentum in FY27.
Investor preferences also shifted geographically in FY26. Maharashtra retained its position as the top destination, with investment outlays rising to ₹11.05 trillion from ₹7.94 trillion. Andhra Pradesh climbed from fifth to second place, narrowly surpassing Gujarat, which fell to fourth. Rajasthan held onto third place despite a slight decline in its share of total investments. Odisha moved up to fifth, while Karnataka dropped to sixth. Tamil Nadu re-entered the top 10 with fresh investments nearly doubling to ₹2.29 trillion.
In corporate earnings for the January-March quarter, companies outside the banking, financial services, insurance (BFSI), and oil & gas sectors posted the best profit growth in over four years. Combined net profits of these firms rose 19.7 percent year-on-year to approximately ₹47,530 crore, supported by faster revenue growth and margin improvements. Overall net sales across sectors increased by 9.2 percent, the strongest pace in seven quarters. However, oil refiners experienced profit declines, led by Reliance Industries, with a combined net profit decrease of 8.6 percent in the quarter.
As India’s investment environment continues to evolve amidst external uncertainties, the interplay between private sector dynamism and public sector support will likely shape the trajectory of capital formation and economic growth in the coming year.