The 97th Survey of Projects Investment in India indicated a slowdown in private investment in Q3 of FY25. The Government sector, which carried forward its impressive increase in fresh investment of Q2 in Q3, facilitated the overall growth seen in Q3. Though, the total number of projects increased considerably, from 2,407 in Q2 to 3,292 in Q3, the total investments grew by 9.87 percent, rising from Rs 10,43,458.46 crore to Rs 11,46,427.03 crore during the same period.

Reflecting the overall slowdown, the third quarter saw a decline in the announcement of mega projects—those valued at Rs 1,000 crore or more. In all, 228 mega projects worth Rs 7,69,475.70 crore were announced in Q3/FY25 as against 232 projects worth Rs 8,40,164.96 crore announced in Q2/FY25, pointing towards a fall in private investment.

By Sectors

In the third quarter of FY25, the Manufacturing sector saw the announcement of 338 new projects with a combined investment of Rs 2,39,337.50 crore, indicating a 12.44 percent increase from the previous quarter’s Rs 2,12,866.40 crore of fresh investment. As a result, the sector’s share in total investment rose marginally from 20.40 percent in Q2 to 20.88 percent in Q3.

Within this sector, fresh investment in the Basic Chemicals sector nearly doubled with a 99.28 percent rise. A Rs 9,000 crore Green Hydrogen project of Ashoka Buildcon at Begusarai, Bihar, and a Rs 8,500 crore Chlorinated Polyvinyl Chloride project of Reliance Chemicals in Gujarat were the prominent projects announced in this sector in Q3. Ambuja Concrete North, UltraTech Cement, and Dalmia Cement (Bharat) intend to add around 20 million tonne of cement capacity at an aggregate investment of Rs 11,400 crore.

The fresh investment in the Iron and Steel, surged by 261.51 percent, mostly due to the heavy investment intentions announced by ArcelorMittal Nippon (Rs 70,000 crore); JSW JFE Electrical Steel (Rs 11,890 crore) and Orissa Metallurgical Industry (Rs 6,000 crore).

Eight mega projects helped the Electronics sector to post a growth of 30.43 percent in Q3. Of this, a Rs 19,550 crore semiconductors project of Vellore Information Technology and a Rs 8,000 crore of Solex Energy were prominent ones.

Pharmaceuticals (-81.75 percent) and the Automobile sectors (-90.78 percent) were some of the prominent sectors to witness a sharp fall in fresh investment in Q3. The Q2 had seen the announcement of two mega passenger car projects worth Rs 48,473 crore by JSW Green Mobility and Toyota Kirloskar Motors.

The Mining sector experienced a downturn too, with investments decreasing by 20.75 percent, from Rs 24,836.77 crore in Q2 to Rs 19,683.64 crore in Q3. Consequently, its share of total investment dropped from 2.38 percent to 1.72 percent.

The Electricity sector, where the non-conventional power projects continued attracting private investment, demonstrated healthy growth, The aggregate investment surged by 21.90 percent, from Rs 3,69,320.04 crore in Q2 to Rs 4,50,215.79 crore in Q3. This sector's share of total investments increased from 35.39 percent to 39.27 percent, emphasizing its preference as one of the choicest investment sectors by the private project investors.

The conventional electricity sector saw a robust 55.04 percent rise, complemented by an impressive 78.99 percent growth in Hydel Power projects. Renewable energy maintained its dominance, as fresh investment in Solar and Wind Power expanded by 11.06 percent. While the fresh investment in the conventional sector increased from Rs 91,081.58 crore in Q2 to Rs 1,41,210.14 crore in Q3, the same in non-conventional power sector increased from Rs 2,78,238.46 crore to Rs 3,09,005.65 crore.

The Private sector with 174 projects worth Rs 3,04,549 crore accounted for around two-thirds of the total investment attracted by the Power sector in Q3. On the other hand, the Government sector (State and Central) with 77 projects worth Rs 1,45,666.66 crore accounted for the balance one-third of the fresh investment.

The Infrastructure recorded a modest 0.76 percent rise in investments, moving from Rs 4,22,132.49 crore in Q2 to Rs 4,25,323.52 crore in Q3. As a result, its share in total investments declined from 40.46 percent to 37.10 percent. Within the Infrastructure sector, the Roadways sector registered a quarterly growth of 88.82 percent. As against 308 projects worth Rs 68,528.86 crore attracted in Q2, in the third quarter, 704 new projects worth Rs 1,29,398.32 crore were announced. The top three investors were the Public Works Department, Rajasthan (Rs 51,298.89 crore), the National Highways Authority of India (Rs 29,897.77 crore), and the Public Works Department, Maharashtra (Rs 8,431.24 crore).

Fresh investment increased handsomely in the Shipping Infra sector in Q3. The two mega projects - a Rs 20,000 crore, second Satellite Port project of Deendayal Port Authority and a Rs 19,743.88 crore expansion project of Karaikal Port helped the sector to attract Rs 45,191 crore in the form of 22 projects.

The Construction sector (comprising Commercial/Business Complexes, Real Estate, and Industrial Parks) saw fresh investment decline by 17.23 percent in Q3 on a quarter-on-quarter basis. A Rs 12,000 crore Residential Township project of Sattva City; a Rs 8,359 crore Ultra Luxury Residential Complex (Gurgaon) of DLF and a Rs 7,750 crore Residential-cum-Commercial (Panchpakhadi) project of Sugee Enterprises were the prominent projects announced in the Real Estate sector in Q3.

The Irrigation sector faced a contraction, with total capex falling by 17.03 percent from Rs 14,302.76 crore in Q2 to Rs 11,866.58 crore in Q3. Its share in total investment also decreased, from 1.37 percent to 1.04 percent. The two mega were announced by the Irrigation & CAD Department, Telangana - Sitarama Lift Irrigation Project of Rs 2,172.99 crore and by the Water Resources Department, Jharkhand - Konar Irrigation Project of Rs 1,737.77.

By Ownership

Government investments exhibited a strong surge, with a 22.75 percent growth in value, contributing 37.77 percent of the total investment in Q3 compared to 33.81 percent in Q2. This growth was led by both Central and State government initiatives. Fresh investment by the state government agencies registered a sharper rise of 34.59 percent in investment value, reflecting their focus on building social infrastructure such as roads, water supply, power distribution, and irrigation. On the other hand, the Central government's fresh capex rose by 11.82 percent and was directed toward sectors like Roads, Power (both Conventional and Non-Conventional), Ports, etc.

A significant increase in foreign investment helped the Private sector to register a modest growth of 3.29 percent in Q3. While Indian private investment slightly declined by 1.41 percent, foreign investment saw a significant 44.16 percent jump, increasing their share in total investment from 6.82 percent in Q2 to 8.95 percent in Q3. A Rs 70,000 crore steel project of Arcelor Mittal Nippon helped the foreign sector post the hike of 44.16 percent in capex in Q3 compared with Q2.

Apart from the super mega steel project, foreign investment commitments were concentrated mostly in the Solar/Wind power projects, which are incentivized by the Government. On the other hand, the Indian Private sector’s capex plans were spread across several sectors like Non-Conventional Power, Ports, Real Estate, Electronics, Cement, Steel, etc.

By States

The analysis of the top ten states in project investments between Q2 and Q3 of FY25 reveals interesting shifts in their rankings in terms of investment volumes.

Rajasthan emerged as the top state in fresh project investments during Q3/FY25, driven by significant contributions from the Power and Roadways sectors. The state secured 67 new power projects—encompassing Solar, Wind, and Hydel power—with a total investment of Rs 1,33,606.5 crore. Additionally, it attracted 83 road infrastructure projects valued at Rs 53,207.96 crore and 98 power distribution projects worth Rs 25,185.36 crore. Together, these projects, making up 94.2 percent of the total new investment attracted by the state, propelled it to the number one state in Q3.

Maharashtra, which held the top spot in Q2 with Rs 268,329.79 crore of capex across 513 projects, slipped to the second position in Q3, even as its number of projects increased to 592. Its investment share declined to Rs 179,495.36 crore, representing 15.66 percent of the total. The slip in rank of the state can be attributed to the month-long state election process in November 2024.

Gujarat too slipped from second position in Q2 to third position in Q3, as its investment volume saw a slight decline from Rs 149,357.74 crore in Q2 to Rs 134,440.25 crore in Q3. Similarly, Karnataka, which ranked third in Q2 with Rs 118,154.76 crore across 257 projects, experienced a slight decrease in both projects and investment value, slipping to the fifth position in Q3 with Rs 89,289.54 crore across 234 projects.

Andhra Pradesh made a notable rise in the rankings, moving from ninth in Q2 to fourth in Q3. Its investment more than doubled, increasing from Rs 32,178.28 crore to Rs 92,907.15 crore, supported by a substantial increase in project numbers from 43 to 152.

The Northern state, Uttar Pradesh also showed marked improvement, climbing from seventh to sixth as its investment grew from Rs 45,426.45 crore to Rs 68,324.06 crore.

Odisha moved up from 8th rank in Q2 to 7th rank in Q3, due to a healthy increase in investment, rising from Rs 40,618.82 crore to Rs 65,440.19 crore. Madhya Pradesh saw modest growth in investment, moving from Rs 54,198.88 crore to Rs 58,636.28 crore. Despite this, its rank slipped from fifth to eighth. Telangana improved its position from tenth to ninth, with investment increasing from Rs 30,410.50 crore to Rs 38,818.29 crore.

A notable new entrant to the top ten league in Q3 was Haryana, which secured the tenth spot with Rs 25,794.03 crore across 80 projects. This pushed Tamil Nadu out of the top ten, as its investment of Rs 46,119.25 crore in Q2 could not keep pace with the capex attracted by other top states.

Outlook

The slowdown in private investment during the third quarter of FY2025 reflects the apprehensions of India Inc. over rising input costs, driven by high inflation and ongoing geopolitical uncertainties. However, the outlook for FY2026 remains optimistic, as favourable economic conditions and policy measures are expected to stimulate private investment activity. Investor-friendly policies and enhanced support for MSMEs and start-ups are likely to encourage increased capital expenditure by private enterprises in the upcoming quarters.

The government’s recent initiative to introduce PLI 2.0 in critical sectors is a positive step towards attracting fresh investment intentions. With the Union Budget 2025–26 set to be presented next month, further investor-friendly measures will by the Central government will boost the confidence of both domestic and foreign project promoters. Such policies are expected to catalyze higher levels of capital commitment, reinforcing the private sector’s role in driving economic expansion.

Continued government investment in core sectors, particularly transport and social infrastructure, will remain essential for sustaining overall economic momentum. These investments not only lay the groundwork for long-term growth but also complement private sector initiatives by improving the business environment and reducing operational bottlenecks.

Looking ahead, the private sector is projected to regain its pace in the coming months as inflationary pressures ease and policy interventions take effect. Projects Today anticipates uptick in private capex plans, underpinned by improved macroeconomic stability and a supportive policy framework.

About Projects Today

Projects Today is India's largest online databank on new and ongoing projects in India. The website, launched on 8 September 2000, aims to provide the required foresight to its clients based on sectoral insights its research team possesses. The project-related information provides an invaluable marketing resource to assist the business development efforts of the organisations that focus on the new projects market. It is widely used by the project fraternity, primarily, as a business opportunity identifier.

Projects Today conducts Survey of Project Investment, at the end of every financial quarter to gauge the trends in projects investment in India by sectors, state, ownership, etc.

Disclaimer : The opinions expressed within this interview are the personal opinions of the interviewee. The facts and opinions appearing in the answers do not reflect the views of Indiastat or the interviewer. Indiastat does not hold any responsibility or liability for the same.