Current Trends in Private and Public Sector Investments
The private sector is withdrawing from investments amid ongoing trade uncertainties, with current figures surpassing past disruptions like the Covid-19 pandemic.
Private Sector Investment Trends
- Companies have abandoned plans worth ₹14.3 trillion in investments as of September, marking the fourth consecutive quarter of increased dropped projects.
- This figure is higher than the peak of ₹13.4 trillion recorded in March 2019 and also surpasses all quarters since 2011.
- Uncertainties over the US trade deal and stagnant private consumption have deterred private capital expenditure (capex).
- A rise in consumption is anticipated in the last two quarters of FY26, which may boost capex recovery.
Government and Public Sector Investments
- The value of government-dropped projects has declined, indicating a commitment to ongoing projects.
- The public sector continues to drive capex, particularly in roads, infrastructure, power generation, and data centres.
Capacity Utilization and Economic Outlook
- The Reserve Bank of India's Obicus survey records a capacity utilization of 75.8% as of June 2025.
- Capacity utilization is not expected to exceed 80% soon despite growth in private consumption.
Sectoral Impact and Outlook
- Export-oriented sectors face delays due to delayed trade deals with the US.
- Electricity and manufacturing sectors are heavily impacted with over ₹1 trillion in dropped projects each.
- Non-financial services show resilience.
Market Analysis and Predictions
- Listed companies exhibit resilience with significant investment plans in real estate, energy, and data centres.
- Export-oriented companies may stall plans awaiting clarity, but domestic consumption is expected to rise as the RBI eases liquidity conditions leading into FY27.
