NEW DELHI, Sept 28: Private sector investment in India is expected to gather further momentum during the current financial year, with capital expenditure projected to increase to around Rs 3.2 lakh crore in 2026-27 from Rs 2.6 lakh crore in the previous year, according to a report featured in the Reserve Bank of India’s September Bulletin.
The assessment comes amid continued uncertainty in the global economy, but the investment pipeline indicates that Indian companies are maintaining their focus on capacity expansion and long-term projects.
The RBI report examined projects financed through bank and financial institution sanctions, external commercial borrowings and initial public offerings. The pipeline across these channels points towards higher envisaged capital expenditure during 2026-27 compared with the preceding financial year.
The report said the investment outlook remained healthy, although heightened global uncertainties could temper investment sentiment. It also noted that the balance sheets of Indian companies have strengthened considerably in recent years, supported by deleveraging and strong internal accruals.
The improvement in corporate financial positions is significant for the investment cycle because companies with stronger balance sheets have greater capacity to undertake new projects, expand existing operations and commit funds to long-term infrastructure and industrial plans.
Data cited in the RBI bulletin showed that the total cost of projects reached a record Rs 4.4 lakh crore in 2025-26, compared with Rs 3.7 lakh crore a year earlier. The increase points to a broader rise in project activity and reflects greater commitments towards fresh investments by private companies.
Infrastructure continued to account for the largest share of project costs during the year. Within the sector, power emerged as a major contributor, followed by roads and bridges. The concentration of investment in infrastructure highlights the continuing role of energy and transport projects in India’s private investment cycle.
The project pipeline for 2026-27 also provides indications that investment activity could remain firm during the year. The RBI’s analysis combines information from multiple financing routes to assess the likely direction of private sector capital expenditure.
Bank and financial institution financing remains an important source of funding for large projects, while external commercial borrowings and IPOs provide additional avenues for companies seeking capital. The combination of these channels gives an indication of the projects that could translate into actual spending over the course of the financial year.
The expected rise in private sector capex comes at a time when businesses are operating against a complex international backdrop. Global economic conditions, financing costs, commodity prices and geopolitical developments remain factors that can influence corporate investment decisions.
The RBI report therefore cautioned that global uncertainties could affect investment sentiment even as the domestic outlook remains positive. The projected increase in expenditure does not necessarily mean that all projects in the pipeline will be completed within the year, as implementation schedules can change depending on financing, clearances, demand conditions and other factors.
The strengthening of corporate balance sheets, however, provides an important foundation for the investment outlook. Deleveraging in recent years has reduced financial pressure on companies, while stronger internal accruals have improved their ability to fund projects from their own resources.
The investment trend also has implications beyond corporate spending. Higher capital expenditure can support activity across construction, engineering, manufacturing, transport, energy and related services when projects move from planning and financing into implementation.
Infrastructure projects can also create demand for equipment, materials and professional services, potentially generating wider economic activity through associated supply chains.
The RBI’s assessment comes as policymakers and businesses continue to monitor the pace of domestic investment against developments in the global economy. While external risks remain, the project pipeline suggests that Indian private companies are continuing to plan significant investments.
According to the bulletin, the envisaged increase in capital expenditure during 2026-27 indicates that the private investment cycle could maintain its momentum. The actual pace, however, will depend on how quickly projects progress from sanction and financial arrangements to execution.
The latest data thus provides an indication of continued corporate interest in long-term investment, particularly in infrastructure and other capital intensive areas, while also highlighting the importance of maintaining favourable conditions for project implementation.