Private capex revives, capital formation hits high

Private investment in India is showing a strong revival, with capital formation in the first quarter of the current financial year growing at its fastest pace in over three years, according to Economic Affairs Secretary Anuradha Thakur. This resurgence is particularly evident in key sectors such as power, data centres, and metals, as well as across banks credit allocation to industry, large and medium enterprises, and micro and small businesses.

Despite a challenging global economic backdrop with constrained capital, India has attracted a record gross Foreign Direct Investment (FDI) inflow of USD 97 billion in FY26, with first-quarter inflows reaching approximately USD 30 billion. Thakur attributes this turnaround to India's strong foreign investment track record, credibility gained through fiscal discipline, structural reforms, and deregulation, and the resilience of international trade relations, including successful Free Trade Agreements.

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