 "Capex")
India’s private sector appears to have turned tentative in the April-June quarter (Q1), announcing new investment projects worth ₹4.1 trillion, marking an 81.35 per cent decline over the ₹21.7 trillion worth of outlays in the previous quarter, according to data from the Centre for Monitoring Indian Economy (CMIE).
On a year-on-year basis, the Q1FY26 private capex tally was up about 42 per cent, albeit on a low base, as fresh capex plans by India Inc had slipped to a 14-quarter low of ₹2.85 trillion in Q1FY25. This year’s Q1 capex numbers are the second weakest since December 2020, and mark the second sharpest quarter-on-quarter decline in 15 years.
“This is significantly lower than the new investments of ₹21.8 trillion announced in the preceding quarter, but higher than the new investments of ₹2.9 trillion announced in the year-ago quarter,” a CMIE statement noted.
Experts attributed the sequential slowdown in private capex announcements to uncertainties emerging from trade tariffs’ imposition and geopolitical conflicts that have affected sentiment, as well as investors’ tendency to start a financial year cautiously.
Paras Jasrai, associate director, India Ratings and Research, said an analysis of data from June 2020 to June 2025 reveals a consistent pattern where new investment project announcements peak in the fourth quarter (Q4) and decline in the first quarter (Q1) of each financial year.
“This trend suggests that Q1, being the beginning of the financial cycle, typically sees lower investments as investors await greater clarity. In contrast, Q4 reflects higher investment activity, as decisions are made with better information and confidence. The sectors most affected by this fluctuation are metals and mining, which are highly sensitive to policy signals and market expectations,” he remarked.
“To address this imbalance, long-term implementation measures must be prioritised. Improved tariff structures and targeted government interventions are essential to reduce uncertainties and support consistent investment flows throughout the year,” added Jasrai.
In Q1FY26, project completions fell by 18.7 per cent to ₹1.97 trillion from ₹2.42 trillion in the preceding quarter. However, compared to Q1FY25’s ₹744.1 billion tally, this marked a 164 per cent surge.
Data also showed that projects worth ₹122.7 billion were stalled, while projects worth ₹1.2 trillion were revived during the June 2025 quarter. Consequently, the pipeline of outstanding projects increased to ₹331.3 trillion from ₹296.9 trillion in the quarter ended June 2024.
Earlier, in Q1FY25, private sector capex announcements had dropped sequentially by nearly 83 per cent to ₹2.8 trillion from ₹16.7 trillion in Q4FY24, CMIE data available from Q1FY12 shows.
