Private Capital Spending Narrows to Select Sectors as Power and Mining Gain Prominence

Private Sector Capital Expenditure in India: Concentration and Shift in Sectors

Key Findings

• Private sector capital expenditure (capex) in India is becoming increasingly concentrated, with the top five sectors accounting for 82% of total capex in FY27, up from 80% in FY25.
• Despite a largely flat overall capex at Rs 6.1 lakh crore, the composition of investments is changing significantly between FY25 and FY27.

Sectoral Trends

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• Manufacturing remains the anchor of investment, accounting for 44.7% of total capex in FY27, although this is lower than its peak of 48.8% in FY26.
• Energy-linked sectors are gaining traction, with investment in electricity, gas and utilities expected to nearly double from 5.9% in FY25 to 12.7% in FY27.
• Mining has seen a steady increase, with its share rising to 3.1% in FY27, driven by global commodity and energy security concerns.

Declining Sectors

• Information and communication has seen its share fall sharply from 23.3% in FY25 to 15.6% in FY27.
• Other service-oriented sectors, such as administrative services, accommodation, and trade, have either stagnated or declined.

Structural Pivot and Emerging Trends

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• The data points to a structural pivot in private investment priorities toward core infrastructure, energy, and resource-linked industries, aligning with the government's own capex push.
• There are early signs of a shift toward technology and sustainability, with around 7% of firms investing in green energy and 6% investing in robotic equipment in manufacturing.