Introduction
Domestic investment has emerged as a central pillar of India’s economic expansion, reflecting rising confidence across households, corporates, and institutional investors. A combination of sustained macroeconomic stability, improving income growth, deepening financial markets, and expanding access to credit has supported a steady acceleration in domestic capital formation.
Public investment continues to play a catalytic role by crowding in private capital. In contrast, private investment, spanning households, corporates, and domestic institutions, has gained momentum amid healthier balance sheets and stronger profitability. Robust economic growth projections, resilient consumption demand, and increased participation of domestic institutional and retail investors have further reinforced investment activity across asset classes. Together with supportive policy initiatives aimed at strengthening manufacturing, scaling new capacities, and upgrading infrastructure, domestic investment remains a key driver of India’s growth trajectory and long-term economic transformation.
Market Activity
Real Gross Value Added (GVA) is estimated at Rs. 73,82,453 crore (US$ 780.65 billion) in Q1 FY27, registering a growth of 8.2% compared with the corresponding quarter of FY26. Nominal GVA increased by 11.5% to Rs. 80,53,369 crore (US$ 851.60 billion). During Q1 FY27, real GDP stood at Rs. 81,36,153 crore (US$ 860.35 billion), compared with Rs. 75,46,230 crore (US$ 797.95 billion) in Q1 FY26, reflecting a growth of 7.8%. Nominal GDP rose by 10.3% to Rs. 88,26,871 crore (US$ 933.39 billion), from Rs. 80,00,192 crore (US$ 846.29 billion) in the corresponding quarter of the previous financial year, highlighting sustained economic momentum.
The International Monetary Fund (IMF) raised India’s economic growth forecast for 2026 to 7%, from 6.4% projected in July, citing stronger-than-expected economic momentum, resilient domestic demand and robust services activity despite higher global oil prices. According to the IMF’s October 2026 World Economic Outlook, India stands out among emerging and developing economies facing a weaker medium-term outlook due to geopolitical tensions and energy market pressures. The growth forecast was revised upwards by 0.6 percentage points from July and 0.5 percentage points from April. The IMF also raised India’s growth projection for 2027 to 7%, an increase of 0.3 percentage points from July and 0.5 percentage points from April.
On October 14, 2026, Domestic Institutional Investors (DIIs) recorded net investments of Rs. 2,670.44 crore (US$ 279.72 million) across the National Stock Exchange (NSE), Bombay Stock Exchange (BSE) and Metropolitan Stock Exchange of India (MSEI) in the capital market segment, with purchases of Rs. 17,428.61 crore (US$ 1.83 billion) exceeding sales of Rs. 14,758.17 crore (US$ 1.55 billion).
According to BSE data, as of October 15, 2026, the number of registered investors on the Bombay Stock Exchange (BSE) reached 26,61,32,888, marking an increase of approximately 17.95% year-on-year compared with 14 August 2026.
India’s primary market remained active in 2026, with 104 mainboard IPO records till October 2026, accounting for a cumulative issue amount of approximately Rs. 1,55,005.04 crore (US$ 16.24 billion). Large issues such as Jio Platforms, National Stock Exchange of India, SBI Funds Management and Manipal Health Enterprises contributed significantly to overall capital mobilisation.
India’s private equity and venture capital (PE/VC) investments reached Rs. 54,364 crore (US$ 5.7 billion) across 99 deals in August 2026, registering a 98% year-on-year increase and a 32% rise over July 2026. Buyout investments led with Rs. 34,350 crore (US$ 3.6 billion), followed by start-up investments at Rs. 11,452 crore (US$ 1.2 billion). Infrastructure, healthcare and real estate were the leading sectors, together accounting for 75% of total investments. PE/VC exits amounted to Rs. 42,946 crore (US$ 4.5 billion) across 41 exits, while fundraises totalled Rs. 14,315 crore (US$ 1.5 billion) across 14 fundraises during the month.
Investments/developments
Through joint governmental efforts such as coordinated policy actions, supporting local production/programs, working with domestic-based financial institution capital to increase investor/investment confidence, and developing deeper trade linkages and bilateral economic partnerships through additional country-to-country agreements, the Indian domestic investment environment has been improved by better industry/market access, more industrial capabilities (in terms of products), and deeper industry relationships. The Indian government continues to support local production and investment through programs that have motivated potential domestic investors to invest in new capacity and long-term capital. The use of additional capital from existing domestic-based financial institutions further demonstrates the growing confidence of potential domestic investors in India's growth potential. Furthermore, additional trade agreements and other country-to-country bilateral economic partnerships have enhanced India's potential international export competitiveness and improved visibility for potential foreign investments. The combined efforts of the entities named above provide an excellent opportunity for India to develop its ability to attract and retain both domestic and foreign investment, regardless of the rapidly changing global economy. Some of the recent notable investments and developments are as follows:
- On October 13, 2026, Hyundai Motor Group announced an investment of Rs. 1,48,968.75 crore (US$ 15.5 billion) in India through 2032 to expand manufacturing capacity, research and development infrastructure, local supply chains and future mobility technologies. The investment aims to strengthen India’s position as a global automotive manufacturing and export hub, create employment opportunities and accelerate innovation in emerging automotive technologies.
- On September 16, 2026, Fujifilm announced a greenfield semiconductor materials manufacturing facility in India with an investment of about Rs. 800 crore (US$ 84 million). Construction is expected to begin in October 2026, with commercial production targeted for FY28.
- On September 15, 2026, Mazagon Dock Shipbuilders signed MoUs to be the anchor shipyard at greenfield shipbuilding clusters in Dighi, Maharashtra, and Dugarajapatnam, Andhra Pradesh, with about Rs. 15,000 crore (US$ 1.57 billion) proposed at each location.
- On July 24, 2026, HCLTech announced its first AI data centre in the Odisha Sovereign AI Park, Bhubaneswar, in partnership with Sarvam and the Government of Odisha, with a planned outlay of Rs. 14,257 crore (US$ 1.49 billion), including state financial assistance.
- On June 30, 2026, Tata Communications announced strategic investments in subsea cable infrastructure to strengthen the India–Singapore digital corridor and support growing AI and data demands. The company will integrate a new subsea cable system between Mumbai and Singapore and invest in a consortium-led cable connecting Chennai and Singapore, expected to be ready by Q4 2029.
- On June 9, 2026, Meta announced a partnership with Reliance Industries to lease its first AI-enabled data centre in India, with the facility being developed in Jamnagar, Gujarat. The first phase will have a capacity of 168 MW, with an option to scale, and will be powered by renewable energy and cooled using desalinated seawater.
- On May 12, 2026, Hindustan Zinc Limited partnered with Group Nirmal to establish a zinc wire manufacturing facility at its Zinc Industrial Park in Khankhala, Bhilwara, Rajasthan.
- On April 29, 2026, Tata Power Trading Company Limited, Keppel’s Infrastructure Division and Tata Realty and Infrastructure Limited partnered to deploy a 12,100 TR Cooling-as-a-Service solution at Intellion Park, Chennai.
- JSW Steel and Japan’s JFE Steel Corporation officially unveiled JSW JFE Steel Limited, their 50:50 joint venture, at a ceremony in Sambalpur, Odisha, on April 24, 2026. The JV brings together JSW’s operational capabilities and JFE’s advanced steelmaking technologies, strengthening India-Japan collaboration in sustainable steel production.
- Tata Steel inaugurated its first scrap-based Electric Arc Furnace (EAF) in India at Hi-Tech Valley, Ludhiana, with an investment of approximately Rs. 3,200 crore (US$ 362.1 million). The facility has a capacity of 0.75 million tonnes per annum and is designed to use 100% steel scrap as raw material and nearly 50% renewable energy, with CO₂ emissions targeted at less than 0.3 tonnes per tonne of steel.
- In February 2026, Adani Group announced plans to invest Rs. 8,83,800 crore (US$ 100 billion) by 2035 to develop renewable energy-powered, AI-ready hyperscale data centres, aimed at positioning India as a global technology hub.
- Airbus, the European aerospace major, has launched a Centre of Excellence for aerospace studies at Gati Shakti Vishwavidyalaya (GSV) in Vadodara, Gujarat. This Centre of Excellence is a significant milestone in the long-term partnership between Airbus and GSV, which aims to enhance the Indian aerospace sector through research, innovation, and developing new talent.
- Google announced a series of AI-focused investments and collaborations to strengthen India’s AI ecosystem on December 16, 2025, including funding of Rs. 66 crore (US$ 8 million) for four government-backed AI Centres of Excellence across healthcare, education, urban governance, and agriculture. The company also committed targeted grants such as Rs. 16.6 crore (US$ 2 million) for the Indic Language Technologies Research Hub at IIT Bombay and Rs. 3.3 crore (US$ 0.4 million) for building Health Foundation Models, reinforcing India’s push to “Make AI in India and Make AI work for India.
- India Optel Limited signed a collaboration agreement with Safran Electronics & Defense on December 22, 2025, for the transfer of production and local manufacturing of two high-precision, combat-proven defence systems in India. Under the partnership, IOL will undertake manufacturing, final assembly, testing, quality control and lifecycle support, strengthening India’s indigenous defence manufacturing capabilities in line with the Make-in-India programme.
- Amazon has announced plans to invest Rs. 2,90,000 crore (US$ 35 billion) across its businesses in India through 2030, focusing on AI-driven digitisation, export growth, and job creation. This builds on nearly Rs. 3,30,000 crore (US$ 40 billion) already invested in the country, which has supported small business digitisation, enabled ecommerce exports, and strengthened Amazon’s long-term presence in India.
- Adani Group announced plans on December 19, 2025, to invest Rs. 1,00,000 crore (US$ 12 billion) in its airports business over the next five years, citing strong long-term growth prospects in India’s aviation sector. The investment coincides with the start of commercial operations at Navi Mumbai International Airport, developed at an initial cost of Rs. 19,650 crore (US$ 2.4 billion), further strengthening the group’s presence in aviation infrastructure.
- ArcelorMittal announced three new renewable energy projects in India with a combined capacity of 1 GW, taking its total renewable capacity in the country to 2 GW and global capacity to 3.3 GW. The projects, to be developed in Maharashtra, Rajasthan, and Gujarat, involve a total capital expenditure of Rs. 7,500 crore (US$ 0.9 billion) and will supply clean power to AMNS India, supporting decarbonisation of steelmaking operations and delivering significant long-term CO₂ savings.
- Bharti Airtel and Google announced a strategic partnership on October 14, 2025, to set up India’s first AI hub in Visakhapatnam, Andhra Pradesh, anchored by a multi-year investment of Rs. 1,25,000 crore (US$ 15 billion). The initiative includes gigawatt-scale data centres, subsea cable infrastructure, and high-capacity fibre networks, aimed at strengthening India’s digital backbone and accelerating nationwide adoption of artificial intelligence.
- Hinduja Group has agreed to invest Rs. 20,000 crore (US$ 2.4 billion) in Andhra Pradesh in a phased manner to expand its presence across energy, renewable power, and electric mobility. The investment includes capacity expansion of the Visakhapatnam power plant, development of solar and wind projects, setting up an electric bus and light commercial vehicle manufacturing plant, and creation of a statewide EV charging network, strengthening the state’s clean energy and transport ecosystem.
- On September 10, 2025, Tata Consultancy Services (TCS) Limited entered a strategic partnership with CEA, a French public research institution, to jointly develop Physical Artificial Intelligence (AI) solutions that integrate robotics, artificial intelligence, and intelligent systems. These solutions are designed to enable machines to perceive, interpret, and interact with the physical world, advancing digital transformation across industrial processes.
- BPCL signed a non-binding MoU with Oil India Limited on October 28, 2025, to explore collaboration on its upcoming greenfield refinery and petrochemical complex near Ramayapatnam Port in Andhra Pradesh. The proposed facility, with a capacity of 9–12 MMTPA, entails an estimated investment of Rs. 1,00,000 crore (US$ 11 billion) and is positioned as a key project supporting India’s downstream expansion and energy self-reliance.
- US-based pharmaceutical company Eli Lilly announced that it will establish a manufacturing and quality hub in Hyderabad to oversee regional production and support local contract manufacturing partners. The new facility strengthens Lilly’s global manufacturing network and builds on its expanding presence in the city, following the recent launch of its innovation centre in Gachibowli focused on AI, automation and digital capabilities.
- VinFast inaugurated its first manufacturing facility outside Vietnam in Tamil Nadu on August 5, 2025, marking a major milestone in the company’s global expansion and India entry strategy. Spread across 400 acres, the plant will initially assemble premium electric SUV models with a starting capacity of 50,000 vehicles per year, scalable to 150,000 units, while generating thousands of direct and indirect jobs and strengthening India’s position in the EV manufacturing ecosystem.
- Jio Financial Services Limited (JFSL) and Allianz of Germany have incorporated a joint venture company, Allianz Jio Reinsurance Limited (AJRL), to operate in the Indian reinsurance sector.
- On September 2, 2025, Tata Electronics signed an MoU with Germany’s Merck to collaborate on semiconductor materials, fabrication infrastructure, and supply chain development for Tata’s upcoming Fab in Dholera, Gujarat.
- On July 21, 2025, Reliance Industries announced progress on its Rs. 88,000 crore (US$ 10 billion) clean energy investment, aimed at developing gigafactories and achieving net-zero carbon emissions by 2035. Analysts view this as a major growth driver for the company’s new energy business.
- Microsoft has announced a significant Rs. 25,587 crore (US$ 3 billion) investment in India over the next two years to bolster its cloud and artificial intelligence (AI) infrastructure. This initiative aims to establish new data centres and accelerate AI innovation, aligning with Prime Minister Mr. Narendra Modi's vision of transforming India into a developed nation by 2047. Additionally, Microsoft plans to train 10 million individuals in AI skills by 2030, reinforcing its commitment to fostering a robust AI ecosystem in India.
- Saatvik Green Energy announced on October 9, 2025, that it will invest Rs. 3,150 crore (US$ 378 million) to develop its Odisha facility, expanding its solar module capacity to 4 GW and solar cell capacity to 4.8 GW.
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 simplify the process of making domestic investments. Some of these are:
- On October 14, 2026, Nexon Geochem signed a memorandum of understanding with the Andhra Pradesh Economic Development Board to invest Rs. 1,250 crore (US$ 130.94 million) in a rare-earth permanent magnet manufacturing facility in Thondangi, Kakinada district.
- Prime Minister Narendra Modi inaugurated the Kaynes Technology semiconductor plant in Sanand, Gujarat, on March 31, 2026, marking the commencement of production and strengthening India’s semiconductor manufacturing capabilities.
- On February 28, 2026, Prime Minister Narendra Modi inaugurated Micron Technology’s Semiconductor Assembly, Test and Packaging (ATMP) facility in Sanand, Gujarat, marking the commencement of commercial production.
- On February 20, 2026, the Government of Gujarat signed an MoU with Larsen & Toubro VYOMA to develop a 250 MW green AI-ready data centre campus at Dholera SIR with an investment of Rs. 25,000 crores (US$ ~3 billion).
- In January 2026, Maharashtra signed 19 MoUs worth Rs. 14.50 lakh crore (US$ 164.05 billion) at the World Economic Forum in Davos, spanning sectors such as green energy, IT-ITES, EVs, data centres and infrastructure.
- Fintech major PhonePe, on September 10, 2025, signed a memorandum of understanding (MoU) with the Small Industries Development Bank of India (SIDBI) to offer an end-to-end digital solution through the Udyam Assist Platform (UAP), aimed at empowering micro enterprises and merchants. The collaboration seeks to formalise Informal Micro Enterprises (IMEs) across India by providing digital-first Udyam Assist registration, enabling access to government schemes, credit facilities, and the broader digital payments ecosystem.
- India’s first domestically produced semiconductor chip is expected to be available by the end of 2025. On August 23, 2025, Prime Minister Mr. Narendra Modi announced that several semiconductor fabrication plants are currently under construction and that India is also making rapid progress in developing its own 6G network.
- Secretary, Ministry of Electronics and Information Technology (MeitY), Mr. S. Krishnan stated that the Central Government has committed nearly Rs. 62,900 crore (US$ 7.17 billion), which is about 97% of the Rs. 65,000 crore (US$ 7.41 billion) earmarked under the India Semiconductor Mission. The remaining funds will support a few smaller projects. Of this, Rs. 10,000 crore (US$ 1.14 billion) has been allocated for modernising the Semiconductor Laboratory in Mohali, Punjab, and Rs. 1,000 crore (US$ 114 million) for the design-linked incentive scheme.
- In October 2025, the Government of India, through the Ministry of Agriculture and Farmers Welfare, launched the PM Dhan-Dhaanya Krishi Yojana and the Self-Reliance in Pulses Mission. The initiatives involve public investments of Rs. 42,000 crore (US$ 5.04 billion) to improve agricultural infrastructure, boost productivity, and enhance farmers’ income across the country.
- The Indian government has earmarked Rs. 1,345 crore (US$ 157.7 million) to boost domestic production of rare earth magnets, crucial for electric vehicles, electronics, and renewable energy. The initiative aims to reduce import dependency and strengthen India's critical mineral supply chain.
- Prime Minister Mr. Narendra Modi inaugurated and laid the foundation stone for development projects worth over Rs. 18,600 crore (US$ 2.18 billion) in Odisha. The investments span key sectors including drinking water, irrigation, agricultural infrastructure, healthcare, rural connectivity, and transportation, underscoring the government’s focus on boosting state-level development and infrastructure.
- The Union Minister of Ports, Shipping & Waterways, announced initiatives to enhance the capacity of Kandla Port, involving an investment exceeding Rs. 57,000 crore (US$ 6.59 billion). Among the key announcements is the establishment of a new Mega Shipbuilding Project, which will entail an investment of Rs. 30,000 crore (US$ 3.47 billion).
- India’s new rules for environmental, social and governance investments and ratings are likely to attract more investors to the nation’s US$ 1.4 billion market and serve as a model for other countries. Over the last two years, India has implemented many measures to regulate its market for green and other assets, most notably permitting domestic fund managers to create plans under six types of ESG strategies.
- The introduction of the Goods and Services Tax, easing liquidity problems of NBFCs and Banks, the reduction of corporate tax, improvements to the business environment, changes to the FDI policy, reduction in Compliance Burden, policies to support domestic manufacturing through public procurement orders, and the Phased Manufacturing Programme (PMP) are just a few of the actions taken by the government to encourage domestic investments.
- The Ministry of Labour and Employment has taken several steps to streamline labour laws to make conducting business easier. By condensing, combining, and rationalising the pertinent provisions of 29 Central Labour Laws, the Government has notified four labour codes: the Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020, and the Code on Occupational Safety, Health, and Working Conditions, 2020.
- The government introduced the India Industrial Land Bank (IILB), which is a GIS-based portal - a one-stop repository of all industrial infrastructure-related information - connectivity, infrastructure, natural resources, terrain, plot-level information on vacant plots, line of activity, and contact details.
Road Ahead
India’s investment trajectory is expected to stay on a firm footing in FY26 and the years ahead, underpinned by consistent economic performance, predictable policymaking, and strengthening market sentiment. Public policy measures aimed at boosting domestic manufacturing and self-reliance are translating into higher capital deployment, while new-age industries such as chip fabrication, green energy, electric vehicles, and precision manufacturing are emerging as key investment magnets. These trends reflect India’s increasing integration into global value chains and its growing attractiveness as a long-term production base.
Further, ongoing improvements in the regulatory and operating environment, including streamlined tax structures, better logistics connectivity, and modernised labour frameworks, are supporting investment-led growth. The expanding role of domestic financial institutions and rising household participation in capital markets are improving the availability of risk capital and long-term funding.
References: Press Information Bureau (PIB), NSE, BSE, Media Reports, IVCA
Partners
