Initiatives in Maharashtra and summits in Madhya Pradesh and Chhattisgarh may have played a key role in driving new commitments, lifting the total value of new projects to Rs 18.7 trillion for the quarter under review. Large-scale investments in the power sector in particular bolstered the figures.
The value of new project announcements more than doubled from the December quarter and was higher than the level seen in March 2024, when pre-election activity drove a spike in commitments. New projects for the March quarter are higher than in any previous period on record, according to CMIE, which has maintained capex data since at least 1995-96. The value of completed projects also saw an uptick, reaching Rs 1.5 trillion.
Electricity projects dominated the landscape, accounting for Rs 8.8 trillion in new announcements, surpassing manufacturing, which recorded Rs 6.3 trillion worth of new projects. Manufacturing project announcements lagged overall growth sequentially.
“Core infrastructure is a big part of capex commitments,” noted independent market expert Deepak Jasani. He noted that while power investments are crucial amid ongoing shortages, the trajectory of capacity expansions in downstream industries — such as food processing, automobiles, and electronics — will be key to job creation and diversification of India’s manufacturing and trade profile. Steel companies are investing with a medium-term outlook, but broader expansion will depend on sector-specific capacity utilisation trends.
If utilisation rates decline due to American tariffs, fresh investments could slow in the near term, he said.
Manufacturing companies are currently using less than 75 per cent of their existing production capacity, according to the Reserve Bank of India’s quarterly Order Books, Inventories, and Capacity Utilisation Survey (OBICUS). The latest data, released in February for September 2024, pegged capacity utilisation at 74.2 per cent — or, 74.7 per cent on a seasonally adjusted basis.
Greater optimism among companies and higher government spending have contributed to increased investment proposals, according to Bank of Baroda chief economist Madan Sabnavis. “Again, it is sector-specific and not broad-based.”
Government-led new project announcements outpaced private sector initiatives. Public sector new projects surged 287 per cent quarter-on-quarter to Rs 5.8 trillion, compared with an 89 per cent increase in private sector projects to Rs 12.9 trillion.
Investment summits played a pivotal role in attracting some of the largest new commitments, according to a separate note by CMIE. State-run power giant NTPC announced projects worth at least Rs 2.8 trillion at summits hosted by Madhya Pradesh and Chhattisgarh. Overall, Madhya Pradesh secured investment proposals exceeding Rs 4 trillion during the quarter, Chhattisgarh more than Rs 1 trillion, and Maharashtra over Rs 3 trillion, including a Rs 40,000 crore steel plant from Jindal Stainless.
Looking ahead, global trade developments may shape investment trends in the coming quarters. “June may not be as good as the March quarter because of seasonality,” said Jasani. “A lot will also depend on the impact of US tariffs.”
 "factories, roads, power plants")