India’s corporate capex rose 11% to ₹9.4 lakh crore in FY25, and the government’s capital expenditure increased 40% in H1 FY26, signalling a strong revival in investment activity amid infrastructure push and private-sector revival.
Corporate capex recovery takes hold
Corporate capital expenditure (capex) by 1,899 listed non-financial companies in India reached approximately ₹9.4 lakh crore in FY25, marking an 11 % year-on-year increase. The rise was led primarily by sectors such as oil & gas (19 % share), power (15 %), telecom (10 %), automobiles (9 %) and non-ferrous metals (5.5 %). For example, power recorded a particularly sharp uptick, while non-ferrous metals posted a 53.2 % growth. This indicates that the private sector is returning to spending on capacity expansion, equipment and infrastructure after years of subdued investment. The upturn in corporate capex is significant given previous years of hesitation on large scale spending due to demand weakness and global headwinds. The breadth of the increase is also noteworthy — not just one or two large companies are spending; multiple sectors are showing move into higher capex mode.
Government capex surge amid infrastructure focus
On the public-side, central government capital expenditure during the first half of FY26 (April-September) surged roughly 40 % year-on-year, reaching around ₹5.8 lakh crore, or over 50 % of the annual budgeted target. Key ministries such as Roads & Highways and Railways posted strong utilisation rates of the budget, driving the surge. The jump partly reflects a low base effect from the previous year when election-led slowdowns affected spending, but the scale of increase shows infrastructure and transport remain priority areas in government strategy. State-level capex also improved, and central public sector enterprises recorded a roughly 14 % rise in H1 capex. Combined, these trends show India is pushing hard on investment to support growth ahead of global headwinds.
What this means for investment cycle, sectors and growth
The dual rise in corporate and government capex is critical — capex is not only about adding capacity but about signalling future growth, employment and productivity gains. With corporate spending growing, private sector engagement in the investment cycle is returning, which matters because sustainable growth depends on private investment, not just government spending. For sectors, infrastructure, power, industrial metals and auto remain at the front. For instance, steel and non-ferrous metals are benefiting from both private and public capex. On the infrastructure front, roads, rail and transport networks are seeing accelerated rollout.
However, challenges remain. The corporate capex growth rate — 11 % in FY25 — while positive, is modest compared with the range some analysts expected (20 %+). Recent reports had shown corporate capex exceeding ₹11 lakh crore in some subsets, indicating variation in data samples. Moreover, global demand softness, supply chain constraints and margin pressures could temper further capex expansion. On the government front, the large H1 surge may make H2 growth tougher unless fresh project pipelines and state-level spending accelerate.
Implications for markets, policy and investors
For equity markets and corporate strategies, rising capex supports higher demand for capital goods, industrial equipment, construction materials, heavy machinery and logistics services. Investors may focus on companies in power, metals, transport equipment and infrastructure services where capex is rising. For policy makers, sustaining capex momentum will require clearing bottlenecks like land acquisition, regulatory approvals and financing for state-level projects. Ensuring absorption of investment and linking capex to productivity and output will be key to translating spending into growth. For the broader economy, this capex uptick may translate into stronger GDP performance, job creation and inflation-moderating supply side benefits over the year ahead.
Takeaways
Corporate capex in FY25 rose 11 % to ~₹9.4 lakh crore, signalling private sector revival.
Government capex in H1 FY26 grew ~40 % to ~₹5.8 lakh crore, driven by infrastructure ministries.
Industrial sectors like power, metals, telecom, automobiles are front-runners in the capex surge.
Sustaining the momentum will require bottleneck resolution, state-level participation and private sector scaling.
FAQs
Q: What counts as “capex” in this context?
Capex refers to capital expenditure by companies or government in fixed assets such as plants, machinery, infrastructure, equipment and construction – investment aimed at building future capacity, rather than just operational expenses.
Q: Why is the private sector capex of ₹9.4 lakh crore for FY25 described as “11 % growth”?
That figure comes from a sample of 1,899 listed non-financial companies whose aggregate capex rose 11 % year-on-year to that level — showing those firms increased investment compared to the prior year.
Q: Does the 40 % growth in government capex guarantee full-year capex targets?
Not necessarily. The half-year surge is strong, but achieving the full-year target will depend on H2 momentum and whether spending continues or slows due to fiscal or pipeline constraints.
Q: How should investors interpret this capex data?
Capex upticks typically signal future growth, higher demand for capital goods and infrastructure services, and support for companies in sectors such as industrials, construction, transportation equipment and metals. Investors might look to firms positioned to benefit from rising investment flows and infrastructure rollouts.
