Andhra Pradesh corners 25.3% of FY26 investments: Bank of Baroda report

Reflecting an uptick in sentiment, fresh investment plans unveiled in the first nine months of 2025-26 (FY26) have risen 11.5 per cent to ₹26.62 trillion, with the private sector accounting for nearly 90 per cent of this tally, according to a Bank of Baroda report on the investment climate. 

Over a quarter of these investments are planned in Andhra Pradesh, which has emerged as the biggest magnet for new investment proposals so far this year, followed by Odisha, which has secured 13.1 per cent of planned outlays. Maharashtra and Gujarat, traditionally among the top two investment destinations in the country, are now ranked third and fifth, respectively, separated by Telangana which has attracted nearly a tenth of all new outlays planned, according to the report based on data from the Centre for Monitoring Indian Economy (CMIE).   

The private sector dominated the investment pipeline with a share of 89.7 per cent or ₹23.87 trillion, while government sector investments stood at ₹2.75 trillion. 

A significant chunk of these investments, worth ₹10 trillion, were announced in the just-concluded October-December 2025 quarter, marking a 16.2 per cent increase on a quarter to quarter basis. 

“This is on the back of a very positive policy package of the government which has focused on capex, lowering of income tax rates and GST 2.0. Further, there has been a tendency for interest rates to also come down which were to spur investment activity. Hence the investment environment does appear to be positive in the present financial year,” the report’s authors averred. 

About half of the new investments in the first nine months of this fiscal are in the infrastructure sector, led by electricity that accounted for 22.6 per cent of outlays, most of it in the renewable energy space. 

Chemicals and chemical products followed closely with a 21.8 per cent share, while metals and metal products accounted for 17.3 per cent. While the top five sectors, including IT and transport services, constitute 80 per cent of total investment plans, just about 3 per cent of outlays were in consumer-oriented industries.  

“This trend in higher investment announcements does augur well for capital formation going ahead which is presently in a range of 30-31 per cent of GDP in terms of gross fixed capital formation (GFCF),” the bank’s economic researchers said in the report.

“…Investment has been predominantly in the capital goods industries with the front end being provided by infrastructure. It can be hoped that with time as consumption accelerates, there will be a tendency for capacity utilisation rates to improve thus leading to higher investment. As investment gets broad based and more encompassing, the present skew towards infrastructure will reduce,” they reckoned. 

While the top five states cornered about 68 per cent of new investments, the other states in that witnessed significant investment intentions included, Tamil Nadu (4.9 per cent of outlays), Rajasthan (4.3 per cent), Chhattisgarh (3.9 per cent), Madhya Pradesh (3.2 per cent), and Uttar Pradesh (2.7 per cent), followed closely by West Bengal (2.6 per cent) and Karnataka (2.1 per cent).