Private investment in India accelerates as capital formation hits three-year high

Private investment in India is showing signs of a strong revival, with capital formation in the first quarter of the current financial year growing at its fastest pace in more than three years, according to Economic Affairs Secretary Anuradha Thakur. Speaking at the Kautilya Economic Conclave, Thakur noted that private companies are committing to new projects, particularly in sectors such as power, data centres and metals, while bank credit to industry, large and medium enterprises, and micro and small businesses is also gaining momentum.

India attracted a record gross FDI inflow of USD 97 billion in FY26, with the momentum continuing into the current financial year. First-quarter gross FDI inflows in the current financial year reached approximately USD 30 billion. The revival in private investment is occurring against the backdrop of a challenging global environment where capital remains constrained, according to Thakur.

Thakur expressed confidence in India's ability to attract investment, highlighting the government's fiscal discipline. She stated that after concerns about private investment not picking up, "the results are beginning to show. Investment is once again leading growth," signalling a turnaround in investor sentiment toward the Indian economy.