06 - 08 - 2026

India records ₹26.75-lakh crore capex announcements from April 1-August 5

The capital expenditure (capex) investments made by companies between April 1 and August 5 stood at ₹26.75-lakh crore, an impressive amount as it comes during times of global uncertainties.

Besides the war, announcements on tariffs by the US also added to the uncertainty. On the positive side, India signed free trade agreements (FTAs), linked with investment intentions, according to a note by Bank of Baroda.

About 56 per cent of the proposed investments come in the information technology enabled sector (ITeS), with almost 99 per cent or ₹14.98 lakh crore, directed to data centre and artificial intelligence space by 13 companies. This is clearly the next big thing in the country which will see exponential expansion and involves large investment.

The Union Budget had also specifically had measures with respect to data centres.

The second-largest investment that can be coming up is in the conventional electricity space with ₹6.86-lakh crore being envisaged by seven companies. Interestingly four of them with an envisaged outlay of ₹6.5-lakh crore was in the nuclear space.

In other electronics group, a total of about ₹51,000 crore has been announced with almost one-third in the solar cells and battery sub-segments. A part of this can also be linked to the PLI scheme, which provides incentives.

Renewables, with around ₹25,000 crore of investment is mainly in solar power related activities. Aluminum and steel are traditional industries witnessing higher demand due to front end infrastructure activity providing a stimulus.

Investment intentions hence appear to still be narrowly defined and have not yet spread to the consumer goods segment. The overall announcements for consumer goods including automobiles was less than ₹2,000 crore with a share of 0.7 per cent. This is indicative of the combination of surplus capacity and demand conditions.

Also global uncertainty has made companies cautious in their investment plans which could get deferred by a couple of quarters until there is more clarity.

The table below gives a view on the announced made by entities in different ownership patterns. The positive feature here is that 86 per cent of the announcements have come from the domestic private sector companies. This does mean that private investment has definitely picked up. The foreign companies accounted for around 8 per cent of the total announcements, and the balance by centre and state government entities.

Lower GDP growth

The GDP growth this year is expected to range between 6.6-6.8 per cent, which will be lower than last year but yet one of the highest across the world.

“We do expect investment to grow marginally lower than last year at 8.5-9.5 per cent compared with 9.9 per cent mainly due to the uncertainty caused by the war whose course is still not known,” the note said.

Sunrise sectors like artificial intelligence and data centres will continue to witness momentum and would be agnostic to the war as the opportunity in these spaces is immense. The infra-based industries would also continue to witness traction as projects like roads, housing and bridges would carry on relentlessly irrespective of the war. The capex of centre and states have been fairly steady here.

However, it would be the consumer-oriented industries where companies would weigh their surplus capacity and prospective demand which will be influenced by the global uncertainty. In fact, for fast moving consumer goods products, the outcome of the monsoon would be important as it will determine the spending capacity of rural India which in turn will impact investment decisions.