Here is a number that should unsettle anyone betting on India’s growth story: private corporate capital expenditure as a share of GDP has fallen from 16.8% in FY08 to roughly 10% in FY24.

Over the same period, India’s GDP has more than tripled. The economy grew, but the animal spirits of the private sector, curiously, did not keep pace. For over a decade, the heavy lifting of capital formation has been done by the government — from highways and railways to ports and digital infrastructure.

But as any economist will tell you, a growth model that depends primarily on public capex is a car running on one engine. For India to sustain 7%-plus growth through the decade, the second engine — private investment — must roar to life.

The encouraging news is that this is beginning to happen. Not uniformly, and not without hesitation, but unmistakably.

The paradox of profitable caution The reluctance of Indian corporations to invest has been one of the great puzzles of the post-pandemic economy. The chief economic advisor, V. Anantha Nageswaran, memorably noted in his Economic Survey of 2023-24 that Indian companies were “swimming in excess profits” while neither investing aggressively nor creating proportionate jobs. Corporate profits as a share of GDP hit a 15-year high in FY24 — yet capital expenditure remained subdued.

The numbers tell the story starkly. Cash and cash-equivalent balances of Nifty 500 companies reportedly grew by 35% over just two years, swelling to over ₹14 trillion by early 2025. Companies were flush, but it seemed that they were hoarding. CMIE data showed that the private sector pulled back projects for four consecutive quarters through September 2025, with project withdrawals hitting ₹14.3 trillion in a single quarter — surpassing even the previous peak of ₹13.4 trillion from March 2019.

Why? The reasons form a familiar but sobering list.

Capacity utilisation hovered around 74–75% — below the threshold that typically triggers expansion. Geopolitical volatility, from tariff wars to supply chain disruptions, made our boardrooms cautious. The scars of the IBC era — when overleveraged giants like Essar & Jet Airways were dragged through insolvency — instilled a lasting risk-aversion. And critically, domestic demand, while growing, was not growing fast enough to justify massive greenfield bets.

What is changing, and fast Yet, beneath this cautious surface, a fairly monumental shift is underway. Let us consider the aggregate picture first. According to the inaugural Forward-Looking Survey on Private Sector Capex by the ministry of statistics and programme implementation (MoSPI), released in 2025, private sector capital expenditure surged 66.3% over four years from FY22 to FY25.

Manufacturing absorbed the largest share at 43.8%, followed by information and communication technology at 15.6%. Gross fixed assets of India’s listed non-financial companies (including oil and gas) rose 20% year-on-year to ₹60.8 trillion by September 2025. The capex cycle, by the hard numbers, has shifted into a distinctly higher gear.

But it is the individual corporate commitments that are truly breathtaking. S&P Global projects that Corporate India’s cumulative capex will double to $850 billion over the next five years. The Tata Group alone has outlined plans to invest approximately $120 billion, spanning airlines, semiconductors, and electronics.

The Adani Group has announced $100 billion over the next decade, primarily targeting ports, airports, and green energy. Reliance Industries, per Morgan Stanley estimates, is set to deploy $60 billion over 10 years — having already invested over $80 billion since the pandemic. These are not tentative toe-dips; these are strategic bets of generational scale.

Semiconductors: The proof of potential If one sector captures the new ambition of Indian private capital, it is semiconductors. India, one of the world’s largest consumers of electronic goods, has until now manufactured virtually zero of the chips inside them. That absurdity is being corrected at a staggering speed.

Tata Electronics has committed over ₹91,000 crore (approximately $11 billion) to build India’s first commercial semiconductor fabrication plant in Dholera, Gujarat, in partnership with Taiwan’s Powerchip Semiconductor Manufacturing Corporation. The facility will manufacture chips for AI, automotive, and computing applications, with a capacity of 50,000 wafers per month. An additional ₹27,000 crore is being invested in an assembly and test facility in Assam. Together, these projects are expected to create over 47,000 direct and indirect jobs.

In December 2025, Intel signed a landmark MoU with Tata to explore manufacturing and packaging of Intel products at these facilities — a validation that global semiconductor giants take India’s ambitions seriously.

Under the India Semiconductor Mission, at least 10 projects have been approved with cumulative investments exceeding $18 billion across six states. Micron Technology has committed over $2.75 billion. This is no longer a policy aspiration; it is a construction site.

The green energy surge India achieved something remarkable in 2025 that went largely under-celebrated: 50% of its total installed power generation capacity now comes from non-fossil fuel sources, reaching this milestone five years ahead of its 2030 Paris Agreement commitment. Total installed non-fossil capacity has tripled from 81 GW in 2014 to 262 GW, with a record 50 GW of renewable capacity added in 2025 alone. Solar capacity alone has seen a 42 times increase since 2014, climbing from under 3 GW to over 123 GW.

Private capital is at the heart of this transformation. The Adani Group announced plans to invest $21 billion in renewable energy, targeting 50 GW capacity by FY30. ReNew disclosed an investment of ₹82,000 crore ($9.3 billion) in Andhra Pradesh alone for multiple green energy projects.

Between 2017 and 2025, India attracted over $62 billion in energy transition investments. The power and transmission sector is projected to account for roughly $300 billion in new investment over the next five years — more than a third of S&P’s projected $850 billion corporate capex total.

Macro tailwinds aligning Several structural forces are converging to make this the most favourable environment for private investment in over a decade. The RBI has cut the benchmark repo rate by a cumulative 125 bps through 2025, bringing it down to 5.25% from 6.50% — a dramatic easing of the cost of capital.

Both wholesale and consumer inflation have fallen to multi-year lows. The corporate tax rate cut of 2019, which brought the effective rate for new manufacturing companies to 17%, continues to improve post-tax returns on investment. And the government’s own capex, budgeted at ₹11.21 trillion for FY26, continues to crowd in private investment by de-risking sectors like infrastructure and logistics.

New reform signals are also consequential. The opening of the nuclear energy sector to private and foreign participation, new labour codes, and insurance sector reforms are expanding the investable frontier. Production-linked incentive schemes across 14 sectors have seeded manufacturing ecosystems in electronics, pharmaceuticals, textiles, circularity and advanced chemistry, creating demand certainty that de-risks private capex.

The strategic opportunity—and who is seizing it What distinguishes this moment is that the smartest Indian corporations are not treating capex as a cyclical response to demand but are treating it as a strategic weapon — a means to lock in competitive positions in sectors that will define the next quarter of a century.

Grasim Industries, the Aditya Birla Group flagship, saw its consolidated fixed assets surge 30% y-o-y to ₹1.25 trillion by September 2025, driven by its aggressive entry into decorative paints and building materials. UltraTech Cement, Adani Ports, and JSW Energy have all expanded capacity through a mix of organic investment and acquisitions. Tata Steel posted 13.6% capex growth in H1 FY26 alone. The diversification is noteable: these are not just commodity-cycle bets but structural plays on urbanisation, energy transition, and supply-chain reconfiguration.

Perhaps most telling is the sectoral breadth. The MoSPI survey found that nearly 40% of firms plan to invest in core competency expansion, while 12% are pursuing purely opportunistic investments. Emerging sectors — green hydrogen, semiconductors, battery manufacturing, data centres, circular economy — are projected to attract $50-100 billion in investment. India’s multi-fab semiconductor vision for Dholera alone is projected to create over 100,000 skilled jobs.

The second engine ignites None of this is to suggest that private capex has universally arrived. The MoSPI survey itself carries a caution: its 2,172 respondent firms represent just 0.001% of India’s approximately 1.8 million registered companies.

Investment remains heavily concentrated among a handful of conglomerates. Only about 1% of intended capex is directed toward green goals. And the projected dip for FY26, while reflecting conservatism rather than retreat, is a reminder that global uncertainty has not vanished.

But the direction is clear. Corporate India’s balance sheets are the strongest they have been in two decades. Debt-to-equity ratios are at historic lows. The government has built the roads, the ports, the digital backbone, and now the semiconductor and green-energy policy architecture that private capital needs to scale. Interest rates are falling. Demand, propelled by a 1.4-billion consumer market and rapid urbanisation, provides the gravitational pull.

The great capex handoff — from public to private, from caution to conviction — is not a forecast. It is a transition already in motion. The corporations that move decisively now will not merely ride India’s growth; they will shape it. Those that wait may find that the window of strategic advantage, like all windows, eventually closes.

Masood Mallick is Managing Director & CEO, Re Sustainability Limited