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Domestic Investment in India

Last updated: Feb, 2026

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.

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. 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:

  • Government/Public Sector Enterprises
  • Private Sector Enterprises
  • Banks/Financial Institutions/Domestic Institutional Investors
  • Retail Investors

Market Activity

According to the Ministry of Statistics and Programme Implementation (MoSPI), the First Advance Estimates project India’s real GDP to grow by 7.4% in FY 2025–26, while nominal GDP is estimated to expand at a faster pace of 8.0%. Real GVA is expected to grow by 7.3%, reflecting sustained expansion in productive activity across sectors. Meanwhile, nominal GVA growth is estimated at 7.7%, indicating steady momentum supported by price and output effects. Nominal GDP increasing significantly from Rs. 1,06,57,000 crore (US$ 1.75 trillion) in FY15 to Rs. 3,57,14,000 crore (US$ 3.96 trillion) in FY26 (First Advanced Estimates).

The International Monetary Fund (IMF) has revised India’s gross domestic product (GDP) growth forecast for FY26 upward by 20 basis points to 6.6%, citing a strong H1 performance, according to its latest World Economic Outlook report. The IMF also raised the FY27 growth forecast by 20 basis points to 6.2%. Last week, the World Bank similarly upgraded India’s FY26 GDP forecast to 6.5% from 6.3% while lowering the FY27 projection to 6.3%, noting higher-than-expected tariffs on India’s exports to the United States (US). The World Bank added that India is expected to remain the world’s fastest-growing major economy, supported by continued strength in consumption growth.

Domestic Institutional Investors (DIIs) played a stabilising role in the equity cash market during FY 2025–26 (April–December 2025), recording net purchases of around Rs. 5.99 lakh crore (US$ 72.0 billion). Strong and consistent buying by mutual funds, insurance companies, and pension funds helped offset periods of foreign portfolio moderation.

According to BSE data, as of January 27, 2026, the number of registered investors on the Bombay Stock Exchange (BSE) reached 24,10,45,829, marking a 16.39% YoY and 1.55% MoM increase.

India’s primary market remained buoyant in 2025, with 103 IPOs launched across a wide range of sectors, including financial services, technology, healthcare, manufacturing, consumer services, renewable energy, and infrastructure. Together, these public issues mobilised around Rs. 1,75,921 crore (US$ 21.1 billion), reflecting strong investor appetite for both large, well-established companies and emerging growth-oriented enterprises.

In November 2025, India recorded 113 Private Equity (PE)–Venture Capital (VC) deals valued at Rs. 46,500 crore (US$ 5.6 billion), marking a 31% year-on-year increase from Rs. 35,700 crore (US$ 4.3 billion) in November 2024. On a month-on-month basis, investment value rose by 4% compared to Rs. 44,800 crore (US$ 5.4 billion) in October 2025. Deal activity also strengthened, with the number of transactions increasing 12% year-on-year from 101 deals in November 2024 and 4% month-on-month from 109 deals in October 2025, reflecting sustained momentum in India’s PE/VC investment landscape.

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:

  • 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 CO鈧� 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.
  • Announced on October 9, 2025, Bharat Petroleum Corporation Limited (BPCL) will invest about Rs. 96,862 crore (US$ 11 billion) to set up a new refinery with a capacity of 1,80,000-2,40,000 barrels per day in Andhra Pradesh. The state government has allocated 6,000 acres of land for the refinery and petrochemicals project and directed BPCL to start commercial operations by January 2029.
  • 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
  • Haier Appliances India looks to become a US$ 2 billion sales company in the next 3-4 years on the back of a high double-digit growth powered by expansion in product category and channels, according to a top official. The home appliances maker has earmarked an investment of over Rs. 1,000 crore (US$ 117.2 million) between FY24-28 to set up new AC Production and Injection Molding Units. It has already ploughed in Rs. 2,400 crore (US$ 281.4 million) in its plants at Pune and Greater Noida so far.
  • ACME Solar announced its intention to invest Rs. 17,000 crore (US$ 1.99 billion) in capital expenditures by FY26, emphasizing the development of hybrid and round-the-clock renewable energy capacities.
  • Assets under management of the wealth management industry is expected to increase from Rs. 95,23,800 crore (US$ 1.1 trillion) in FY24 to Rs. 1,99,13,400 crore (US$ 2.3 trillion) by FY29. This notable growth will be fuelled by changing macroeconomic conditions, rising income levels, and a significant rise in the number of affluent households.
  • According to a recent report by Colliers, a real estate consulting firm, private equity investments in the Indian real estate sector reached a 3-year high in the second quarter of FY25, totalling US$ 2.5 billion. The industrial and warehousing segment accounted for the largest share of these investments, making up 61% of the total, which equates to US$ 1.5 billion.
  • Mahindra Susten, a leading renewable energy solutions provider, is embarking on a pioneering venture into the hybrid renewable energy sector. The company has launched a groundbreaking Rs. 1,200 crore (US$ 144 million) project in the state of Maharashtra. This innovative initiative integrates 101 MW of wind power capacity and 52 MW of solar power capacity, with the aim of generating a remarkable 460 million kWh of clean, sustainable energy. It is expected to significantly reduce CO2 emissions by 420,000 tonnes.
  • In February 2024, Tata Group companies announced of signing memorandum of understanding (MoU) with Karnataka Government to invest Rs. 2,330 crore (US$ 279.48 million) in the state

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:

  • 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.

Note: Conversion rate used for December 2025 is Rs. 1 = US$ 0.011

References: Press Information Bureau (PIB), NSE, BSE, Media Reports, IVCA

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