CII Advocates Phased Fuel Excise Rollback Amid Surge in Private Sector Capital Expenditure

India's Private Sector Capital Expenditure Sees 67% Surge Amid Global Economic Uncertainty

India's private sector capital expenditure (capex) has witnessed a significant surge, rising 67 per cent to Rs 7.7 lakh crore in September 2025 from Rs 4.6 lakh crore a year ago, according to a recent report by the Confederation of Indian Industry (CII). This substantial increase is seen as a decisive evidence of a powerful and broad-based revival in the country's investment cycle.

The CII's analysis of nearly 1,200 companies, drawn from the CMIE Prowess database, reveals that private sector investment, measured as the annual change in net fixed assets and capital work in progress, rose to Rs 7.7 lakh crore in September 2025, a 67 per cent jump over Rs 4.6 lakh crore a year earlier.

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Manufacturing led the way, accounting for Rs 3.8 lakh crore or nearly half of total private capex, with metals, automobiles, and chemicals at the forefront. Services contributed Rs 3.1 lakh crore, or about 40 per cent, driven by trading, communications, and IT/ITeS. The surge in private capex has been accompanied by a rebound in bank credit growth, averaging close to 14 per cent in the second half of FY26 against around 10 per cent in the first half.

Capacity utilisation of manufacturing firms rose to 75.6 per cent in Q3FY26 from 74.3 per cent in the previous quarter, while new order books grew 10.3 per cent year-on-year. The CII has unveiled a five-point industry action agenda to support the economic growth, comprising a phased drawdown of the central excise cut on petrol and diesel, a 45-day MSME payment guarantee, supply-chain ring-fencing, and a front-loading of private capex.

The CII's five-point agenda also suggests its member companies to commit to a 3 to 5 per cent reduction in fuel and power consumption over the next two quarters through process optimisation, efficient logistics, fleet electrification, and accelerated renewable power purchase agreements. The organisation has appealed to industry to step forward and shoulder its share of the national burden during the ongoing period of global stress.

"Buoyed by this strengthening cycle, CII has appealed to industry to step forward and shoulder its share of the national burden during the ongoing period of global stress," said CII Director General Chandrajit Banerjee.

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Indian supply chains will be ring-fenced through diversified sourcing, strategic inventory buffers, and tie-ups with alternative geographies, alongside deeper domestic value addition in components, specialty chemicals, and capital goods, said CII.