Private sector drives ₹26.75 trillion investment proposals in FY27

Domestic private companies accounted for 86 per cent of investment announcements between April 1 and August 5, while ITES led with Rs 14.98 trillion in proposed capex

Investment announcements between April 1 and August 5 in FY27 stood at Rs 26.75 trillion, the bulk of them from the private sector, a report from Bank of Baroda’s Economics Research Department has noted, adding that what makes the number impressive is that the period coincides with uncertainty in global markets. Besides the war, new US tariff announcements have added to the uncertainty, the report said.

 

On the positive side, India has signed Free Trade Agreements (FTAs) with countries that offer scope for export growth linked to investment intentions. In this context, it is interesting to see which industries have witnessed traction.

 

Data shows that 56 per cent of the proposed investments come from the ITES sector with almost the entire Rs 14.98 trillion capex directed into data centre and AI space by 13 companies. This is clearly the next big thing in the country which will see exponential expansion and involve large investment. The Union Budget also specifically included measures regarding data centres. The second largest investment anticipated is in the conventional electricity space with Rs 6.86 trillion capex envisaged by 7 companies. Interestingly, four of these firms, with an envisaged outlay of Rs 6.5 trillion, will be in the nuclear energy space.

 

A positive feature is that 86 per cent of the announcements came from domestic private sector companies. This indicates that private investment has definitely picked up. Foreign companies accounted for around 8 per cent of the total announcements, with the balance coming from centre and state government entities.

 

According to the report, GDP growth for FY27 is expected to range between 6.6-6.8 per cent which will be lower than FY26 but still one of the highest globally. It expects investment to grow marginally lower than last year at 8.5-9.5 per cent compared with 9.9 per cent mainly due to the uncertainty caused by the West Asia war.