The power and information technology (IT) sectors are expected to remain the dominant destinations for investment in India, driven by rising demand for digital infrastructure, data centres and energy capacity, according to a report by Bank of Baroda (BoB).
The report highlighted a significant transformation in India’s investment landscape over the past four years, with sector-specific demand patterns attracting capital across industries. It noted that the positive momentum in domestic investments has continued into the current financial year.
According to the report, total new investment announcements in the four years following the COVID-19 pandemic amounted to around Rs 191 lakh crore, translating to an average of nearly Rs 48 lakh crore annually.
“The two dominant sectors which accounted for almost 50% of the total planned investments are electricity and transport services,” the report said.
The IT sector accounted for nearly 6 per cent of total planned investments, supported by growing focus on artificial intelligence (AI), digital infrastructure and data centres. Data covering the first 75 days of the current year up to June 15 showed a similar trend, with electricity and IT together accounting for 85 per cent of all proposed investments.
The report said the strong allocation toward the power sector reflects efforts to meet rising demand for both conventional and renewable energy. In transport services, investment plans include expansion in the aviation and railway sectors. Two airlines’ announcements to acquire new aircraft significantly contributed to the sector’s investment figures.
The chemicals and metals sectors followed, together accounting for about 24 per cent of planned investments, supported by infrastructure development, machinery demand and construction-related activity.
Consumer-focused sectors accounted for relatively smaller shares of total investment. The automobile industry ranked eighth with a 2.4 per cent share, while food-processing industries stood tenth at 0.7 per cent. Textiles and consumer goods accounted for 0.6 per cent and 0.5 per cent, respectively.
“Hotels and trading have shares of 0.5% and 0.3% which are rising businesses in the last few years,” the report noted. It attributed the trend to changing consumer preferences, with spending increasingly shifting towards services such as tourism and e-commerce, a pattern also reflected in GDP data.
The report added that service-oriented industries generally require lower capital expenditure than sectors such as power and metals, resulting in a smaller share of overall investment announcements.
On the ownership pattern of investments, the report noted a significant shift towards private-sector-led capital spending. Before the pandemic, government projects accounted for an average of 54.2 per cent of total investment announcements. However, between 2022-23 and 2025-26, the private sector emerged as the dominant investor, accounting for 71.3 per cent of planned investments.
The trend, according to the report, reflects growing private-sector confidence and a structural shift in India’s investment ecosystem.
(With ANI inputs)
