Is India's Capex Landscape Signaling Optimism This Fiscal?
Click to start listening
Synopsis
A recent report reveals that India's capex landscape is showing promising signs of optimism this fiscal year, driven by robust investments from both the government and private sectors. This positive trend could bolster the overall investment climate, particularly in key sectors like oil and gas.
Key Takeaways
- Strong capex from central and state governments.
- Revival in corporate capex, particularly in key sectors.
- Positive order book data indicating future growth.
- Investment-to-GDP ratio remains above pre-pandemic levels.
- Expectations of increased capex in oil and gas and steel sectors.
New Delhi, Nov 24 (NationPress) The capex landscape of India in the current fiscal year has shown significant signs of optimism, according to a report released on Monday. The capital expenditure (capex) from both the central and state governments has remained robust, thereby enhancing the overall investment climate.
One of the most positive developments is the resurgence of capex by Indian corporations.
Additionally, data from order books of a representative sample of capital goods companies—a crucial indicator for future capital spending—suggests a promising outlook for capex.
As noted by CareEdge Ratings in their report, "This momentum is anticipated to create beneficial spillover effects across various industries, thereby bolstering the broader capex cycle within the economy."
The report forecasts a rise in capex for sectors like oil and gas and steel in FY26.
Public sector investments have remained strong throughout this year, with the aggregate capex of the top 19 states experiencing impressive double-digit growth.
On the corporate front, the combined capex of 1,899 listed non-financial firms has surged by 11 percent, reaching Rs 9.4 lakh crore in FY25. The report highlights that the increase in investment announcements and completions recorded during the first half of FY26 (CMIE data) reflects a positive investment sentiment.
“While the Centre’s capex has been healthy, we've also observed an enhancement in the overall state capex during H1 FY26. Moreover, corporate capex is gaining traction, primarily driven by sectors such as Oil and Gas, Power, Telecom, and Auto,” stated Rajani Sinha, Chief Economist at CareEdge Ratings.
The order books of capital goods firms are demonstrating strong momentum, which gives us hope for a positive capex outlook, Sinha added. India’s investment-to-GDP ratio has averaged 30.3 percent over the past four years, compared to a pre-pandemic average of 28.6 percent (FY16-19).
However, this ratio has slightly decreased to approximately 29.9 percent in FY25, attributed to election-related constraints impacting the investment landscape in the first half of last year. The report indicates that this trend is expected to reverse in the current fiscal year, as evidenced by emerging signs of a capex revival.
Point of View
The signs of optimism in India's capex landscape reflect a strengthening economic foundation. The resurgence in investments from both government and corporate sectors is a welcomed development, highlighting India's resilience and potential for growth. As the nation navigates through economic challenges, these indicators serve as a beacon of hope for a more prosperous future.
NationPress
24/11/2025
Frequently Asked Questions
What does the recent report say about India's capex?
The report highlights a positive outlook for India's capex landscape, with strong investments from both central and state governments, as well as a revival in corporate investments.
Which sectors are expected to see increased capex?
Sectors such as oil and gas, steel, power, telecom, and auto are projected to experience a rise in capital expenditure.
How has the investment-to-GDP ratio changed?
The investment-to-GDP ratio has averaged 30.3 percent over the last four years but has slightly moderated to around 29.9 percent in FY25.
