Odisha leads in Q1 private capex
New project announcements
by private sector companies fell to a four-quarter low in the three months ended June, showed data from the Centre for Monitoring Indian Economy (CMIE). Total investments in these projects at ₹3.5 lakh crore, however, more than doubled from Rs 1.4 lakh crore a year earlier, the data showed.
Five states dominated the investments, accounting for 85.7% of the newly-announced projects. Odisha led at Rs 1.4 lakh crore, followed by Andhra Pradesh (₹47,110.7 crore) and Haryana (₹45,934 crore).
Experts attributed moderation in investments to prevailing uncertainty around tariffs, and muted domestic demand, both weighing on capacity expansion plans.
"The unprecedented economic uncertainty due to tariffs and geopolitical reasons appear to have been behind the decline in new project announcements," said Paras Jasrai, associate director at India Ratings and Research (Ind-Ra).
India and the US are negotiating a trade agreement, which is expected to be finalised before July 9.
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Sakshi Gupta, principal economist at
HDFC Bank
, noted that a broader and sustainable recovery in domestic consumer demand is essential for driving private capex. "Clarity on external demand is also crucial for sectors with significant export exposure."
The drop in new project announcements aligns with a government survey on private sector capex investment intentions released in April.
This fiscal year, private capex is expected to reach ₹4.9 lakh crore, declining from ₹6.6 lakh crore in FY25, according to the survey released by the statistics ministry.
"Private capex is expected to remain subdued going by the survey, though a pick up could occur in the second half of this fiscal year, as domestic demand strengthens from August with the start of the festive season," said Madan Sabnavis, chief economist at
Bank of Baroda
.
Government capex
rose 54% to ₹2.2 lakh crore in April-May, official data released Monday showed.
At 324, new private projects announced in the first quarter of FY26 were the lowest since Q1FY23, according to an ET analysis. CMIE tracks projects with capex of Rs 1 crore or above.
Across sectors, metals and metal products saw the highest value of new project announcements at ₹1.4 lakh crore, followed by electricity (₹63,207.3 crore) and transport services (₹44,893.5 crore).
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