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.