In Q3 (October-December) of 2024-25, India’s private sector investment fell by 1.4% due to rising inflation and input costs. This followed a brief recovery in Q2.
Government investments saw significant growth, with a 9.9% rise in overall fresh investments, totaling ₹11.46 lakh crore in Q3, up from ₹10.43 lakh crore in Q2.
State government investments grew sharply by 34.6% in Q3, while the Union government's new investments increased by 11.8%.
The private sector's share of new investments decreased from 66.2% to 62.2%.
Foreign investment increased by 44.2% to ₹1.02 lakh crore, largely due to a ₹70,000 crore steel project by ArcelorMittal Nippon.
The slowdown in private investments reflects concerns over high inflation, geopolitical uncertainties, weak corporate results, and subdued urban demand in Q2.
Rajasthan emerged as the top state for new investments in Q3, with its outlays rising nearly threefold compared to Q2.
Maharashtra and Gujarat dropped in ranking, while Tamil Nadu saw a significant decline in new projects.
Investment in mining, irrigation, pharma, construction, and automobiles contracted.
However, investments in infrastructure, especially electricity projects, saw growth.
Social and transport infrastructure are crucial for long-term economic growth.
The investment outlook for 2025-26 is positive, with expectations of easing inflation and policy measures to boost consumption and growth.
COMMENTS