India is witnessing a revival in corporate investment, with fresh investment by Indian firms reaching levels not seen in nearly a decade-and-a-half during the first half (H1) of fiscal year 2025-26. After a period of cautious spending amidst global and domestic uncertainties, businesses seem to have regained confidence, pushing capital deployment across multiple sectors.

One major pillar of this surge is private sector capital expenditure (capex). According to recent projections and reports, private companies have been ramping up investment in infrastructure projects, power, roads, and industrial assets. The infrastructure and power sectors, in particular, are leading this upswing, as they benefit both from government policy support and improving demand metrics.

Another contributing factor has been real estate. Domestic institutional and private equity firms are increasingly channeling funds into commercial offices, retail space, land transactions, hospitality, and alternative real estate segments such as student housing. There’s been a marked shift toward investing in land assets, especially in major metro regions where growth prospects around infrastructure expansion remain strong.

Domestic investors are playing a more active role than before. Where foreign investments had once dominated many sectors, in H1 2025-26 the domestic capital has often provided crucial ballast. This shift helps insulate India’s investment climate from global volatility (foreign interest fluctuations, global inflation, supply chain issues).

Furthermore, favourable macroeconomic conditions — stable growth forecasts, moderate inflation, lower policy interest rates (or expectations thereof), strong consumption demand — have combined to improve the outlook for businesses to invest. Sectors tied to domestic demand (consumer goods, retail, housing) are benefiting not only from investor optimism but also from real improvements in fundamentals (income, urbanisation, infrastructure).

However, not everything is smooth sailing. Some sectors still face challenges: rising costs (materials, labour), supply chain bottlenecks, regulatory delays, and the risk of global headwinds (e.g. geopolitics, commodity price swings). Also, while investment volumes are up, whether the execution pace keeps up (projects starting vs being completed) will determine how much of this fresh investment translates into real economic outcomes (jobs, capacity, productivity).

In sum, the first half of FY 2025-26 has given strong signals that Indian firms are breaking out of a cautious shell. The near-15-year high in fresh investments is not just a statistical achievement but reflects growing optimism. If momentum holds, this could mark a turning point in India’s economic cycle, with investment acting as a stronger driver of growth alongside consumption and exports.