Introduction
A rise in domestic investments has been one of the most significant contributors to the growth story of India. Domestic investments in India are divided into two parts - public investments and private investments. Private investments are further divided into two parts, which are household investments and corporate investments. Private domestic investments depend on a slew of factors - macroeconomic stability, high household savings, productivity, access to credit, resolution of non-performing assets, clearing up of balance sheets, etc.
Domestic investments and foreign investments in India work hand-in-hand to help the growth of the country. Growth in emerging economies like India results mainly from innovations that allow domestic sectors to catch up with innovative technology. The process of catching up with the leader in any sector requires the cooperation of a foreign investor who is familiar with the leading technology and a domestic entrepreneur/investor who is familiar with the local conditions.
The Indian private investing space has also been showcasing signs of maturity over the past few years. The market has revealed that new investments accounted for about 50% of VC transactions. The VC-to-PE pipeline has also become robust and consistent.

The concept of 'Make in India' - Aatmanirbhar Bharat, various PLI schemes, and financial incentives provided by the government are a few examples of investor-friendly programmes that domestic companies are utilising to increase their production base and create new capacities, which leads to increasing domestic investments. There are multiple investors driving domestic investments in the country:
Market Activity
India remains the fastest-growing major economy in the world, with real Gross Domestic Product (GDP) growing by 7.8% in Q1 FY26, the highest in the last five quarters. In comparison, growth was 7.4% in Q4 FY25 and 6.5% in Q1 FY25. According to the Ministry of Statistics and Programme Implementation, nominal GDP rose by 8.8% during the same period. Nominal GDP increased significantly from Rs. 1,06,57,000 crore (US$ 1.24 trillion) in FY15 to Rs. 3,31,03,000 crore (US$ 3.88 trillion) in FY25.
Global and domestic forecasts are similarly upbeat, the Reserve Bank of India (RBI) has raised India’s GDP growth forecast for FY26 to 6.8%, up from its earlier estimate of 6.5%. Similarly, the Organisation for Economic Cooperation and Development (OECD) increased its 2025 growth projection for India by 40 basis points to 6.7%, compared to 6.3% projected in June 2025.
In August 2025, Domestic Institutional Investors (DIIs) recorded their 25th straight month of net inflows, investing Rs. 94,829 crore (US$ 10.8 billion), the highest in 10 months. In the first five months of FY26, DIIs invested Rs. 3.24 lakh crore (US$ 37.6 billion), which makes up ~53% of the total investment made in FY25.
According to BSE data, as of October 13, 2025, the number of registered investors on Bombay Stock Exchange (BSE) reached 22,98,09,534, marking a 18.39% YoY and 1.27% MoM increase.
In September 2025, India set a three-decade record for IPO activity, with 25 companies raising Rs. 13,302 crore (nearly 20% of total proceeds), marking the highest monthly tally since January 1997. In H1 FY26, 65 firms are set to raise up to Rs. 69,532.91 crore (US$ 8.2 billion), 35% higher than the Rs. 51,390 crore raised by 40 companies in the same period of FY25, reflecting a strong rebound in primary market activity after the brief slowdown earlier in the year.
In August 2025, India recorded 84 Private Equity (PE) - Venture Capital (VC) investments worth Rs. 10,827 crore (US$ 1.24 billion). In the six months ending June 2025 (H1 2025), the country witnessed 519 PE/VC deals amounting to Rs. 1,28,523 crore (US$ 14.93 billion), reflecting continued investor confidence in India’s growth potential.
Investments/developments
In recent years, the Indian economy has undergone a significant transformation, driven by initiatives like ‘Aatmanirbhar Bharat’ that accelerated Production-Linked Incentive (PLI) schemes across key sectors. This has boosted domestic industrial capacity and attracted strong domestic investments. Domestic Institutional Investors (DIIs) have notably increased their presence in the capital market, surpassing Foreign Institutional Investors (FIIs) and reflecting rising investor confidence. India’s active trade diplomacy has led to Free Trade Agreements (FTAs) with Australia, the United Arab Emirates (UAE), and the United Kingdom with ongoing negotiations with the United States, the European Union, and New Zealand. These factors combined have strengthened India’s economic resilience and its appeal as a stable investment destination amid global uncertainties. Some of the recent notable investments and development are as follows:
Government Initiatives
With the government's focus on making business in India easier through the establishment of nation-specific offices to "handhold" foreign investment, India has advanced in recent years in the rankings for ease of doing business. The government has also attempted to rein in the aggressive tax administration through more openness and transparency. It has also taken multiple other initiatives to improve the business regulatory environment in the country and simplified the process of making domestic investments. Some of these are:
Road Ahead
India’s domestic investment outlook for FY26 and beyond remains strong, supported by sustained economic expansion, steady policy momentum, and improving investor confidence. The government’s continued push through initiatives such as ‘Make in India’, ‘Aatmanirbhar Bharat’, and the Production-Linked Incentive (PLI) schemes is expected to drive capacity creation and strengthen industrial output.
Emerging sectors such as semiconductors, renewable energy, electric mobility, and advanced manufacturing are likely to see significant investments over the next few years, reflecting India’s growing importance in global supply chains. The country’s stable macroeconomic fundamentals and rising private sector participation are also expected to keep investment activity buoyant in FY26.
At the same time, structural reforms in taxation, logistics, and labour codes, along with improvements in ease of doing business and financial inclusion, will continue to create a supportive environment for domestic investors. The increasing presence of Domestic Institutional Investors (DIIs) and a rising base of retail investors are helping deepen India’s capital markets and strengthen its investment ecosystem.

With GDP growth projected at around 6.8% for FY26 and strong momentum across core sectors, domestic investments will remain a critical driver in achieving India’s long-term goal of becoming a US$ 5 trillion economy by 2027.
Note: Conversion rate used for October 2025 is Rs. 1 = US$ 0.011
References: Press Information Bureau (PIB), NSE, BSE, Media Reports, IVCA




