Q4 hit but private capital spending

However, fresh investment plans in India halved to ₹8.6 trillion during the West Asia conflict-hit January-March 2026 quarter compared to over ₹16 trillion in the previous three quarters, according to investment tracking firm Projects Today, but the value of new projects rose 32 per cent to ₹58.25 trillion in FY2026 from ₹44.15 trillion in FY2025. Was.

The number of new projects also increased by 38 per cent to 16,247 from 11,720 in FY2015, with the manufacturing sector recording the strongest growth of 47 per cent. The value of new manufacturing plans rose 58.3 per cent to about ₹17.24 trillion from ₹10.9 trillion a year ago, led by basic metals, basic chemicals, machinery and electronics players. Vedanta’s ₹1.28 trillion aluminum smelter in Dhenkanal, Odisha was the largest single project announced in FY26.

While proposed investments by domestic private investors rose 40.7 per cent to ₹34.06 trillion, plans by foreign investors more than doubled, rising 144.05 per cent to ₹6.91 trillion. Overall, the share of new investment in private capital expenditure schemes was 70.34 per cent, which was 61.23 per cent in FY2015.

The value of new government projects, which had been ramping up for some years to boost the economy and crowd in private capital, reached ₹17.28 trillion, slightly higher than about ₹17.12 trillion in FY2015. The increase was driven by states, whose proposed outlay increased by 3 per cent to about ₹8.67 trillion, slightly higher than the Centre’s new investment of ₹8.61 trillion.

“FY2026 recorded strong year-on-year growth in fresh investments driven by private sector participation, significant improvement in manufacturing and continued momentum in renewable energy. In this sense, the year recorded a clear strengthening of investment intentions compared to FY2025,” said the firm’s latest report tracking investment projects since 2000.

A record 82 percent of private sector projects were mega-investment projects worth Rs. Rs 1,000 crore or more. However, the outlook for this year has turned cautious due to several global headwinds, and public sector capex may need to be reinvigorated in FY27 as undertaking mega projects may be particularly risky amid greater uncertainty.

Shashikant Hegde, CEO and director, Projects Today, told Business Standard, “The year-end weakness in new investments due to geopolitical uncertainties amid higher oil prices and inflation fears is significant as it could impact investment trends in the early months of FY2027. Such uncertainties impact private investment decisions more sharply than public spending.”

“The immediate outlook, therefore, points to slower and more selective investment growth rather than another broad acceleration. Under such circumstances, stronger public sector capital expenditure may be required in FY2027 to maintain overall investment momentum,” he said, noting that there may be a decline in private sector investment commitments in the first half of FY2027, especially for large projects.

There were significant changes in the states preferred by investors in FY2016, even as Maharashtra remained on top and expanded its share with an outlay of ₹ 11.05 trillion, up from ₹ 7.94 trillion in FY2015. Andhra Pradesh jumped from fifth place in FY2015, ousting Maharashtra’s traditional rival for investments, Gujarat, from second place in FY2016 by garnering 15.4 per cent of the total outlay, or about Rs 9 trillion.