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Domestic Investment in India

Last updated: May, 2026

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.

Domestic investment in India

Market Activity

According to the Ministry of Statistics and Programme Implementation (MoSPI), the Second Advance Estimates project India’s real GDP to grow by 7.6% in FY26, while nominal GDP is estimated to expand by 8.6%. Real GVA is expected to grow by 7.7%, reflecting sustained expansion in productive activity across sectors, while nominal GVA growth is estimated at 8.7%. Nominal GDP has increased significantly from Rs. 1,06,57,000 crore (US$ 1.75 trillion) in FY15 to Rs. 3,45,47,000 crore (US$ 3.91 trillion) in FY26 (Second Advance Estimates).

The International Monetary Fund (IMF), in its April 2026 World Economic Outlook, has revised India’s growth outlook upward, reflecting stronger-than-expected economic performance. Growth for 2025 has been revised up to 7.6%, supported by robust momentum in the second and third quarters and continued strength in the fourth quarter. For 2026, the IMF has moderately raised its growth forecast to 6.5%, driven by positive carryover effects from the strong 2025 performance and easing global trade pressures. Growth is expected to remain stable at 6.5% in 2027, highlighting India’s continued position as one of the fastest-growing major economies globally, supported by resilient domestic demand and favourable macroeconomic fundamentals.

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 April 30, 2026, the number of registered investors on the Bombay Stock Exchange (BSE) reached 24,99,44,251, marking a 16.46% YoY and 1.05% MoM increase.

India’s primary market continued to witness strong momentum, particularly in the second half of the year, supported by rising participation from foreign and domestic institutional investors as well as retail investors. During Q3 FY 2025–26, IPO activity remained robust with 39 new listings raising nearly Rs. 98,400 crore (US$ 11.14 billion), reflecting sustained investor confidence and favourable market conditions. Cumulatively, up to December 2025, the Indian IPO market recorded more than 90 listings, mobilising nearly Rs. 1,60,000 crore (US$ 18.11 billion), highlighting healthy demand for new issues across sectors. Strong market sentiment also enabled existing shareholders to monetise investments, with Offer for Sale (OFS) accounting for a significant share of total proceeds.

In Q1 CY2026 (January–March), India recorded 316 Private Equity (PE)–Venture Capital (VC) deals valued at Rs. 82,660 crore (US$ 9.1 billion), reflecting continued investor participation despite global geopolitical uncertainties and temporary supply chain disruptions linked to the ongoing West Asia conflict. In Q1 CY2025, PE-VC investments stood at Rs. 1,01,320 crore (US$ 11.7 billion), highlighting the strong base of investment activity in the previous year. In March 2026 alone, investments were valued at Rs. 35,310 crore (US$ 3.8 billion), compared with Rs. 40,660 crore (US$ 4.7 billion) in March 2025.

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:

  • 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 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.
  • 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.

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 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.

Note: Conversion rate used for April 2026 is Rs. 1 = US$ 0.01071

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

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