Analysts noted potential upside to India’s gross domestic product growth from a recovery in private sector capital expenditure expected in the second half of 2026.
Corporate investment had lagged government-led infrastructure spending, with firms awaiting clarity on trade policy and domestic demand. Improving sentiment after the U.S.-India trade deal may accelerate plant expansions and equipment orders.
Second-half timing aligns with budget implementation, festive season consumption, and typical board approval cycles for capital plans. Sectors such as manufacturing, renewables, and digital infrastructure could lead the rebound.
Economists cautioned that private capex recovery remains contingent on credit costs and global order books. If realized, the turnaround would broaden growth drivers beyond public expenditure alone.
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Sources:
https://www.goldmansachs.com/insights/articles/the-outlook-for-indias-economy-in-2026-amid-new-us-tradedeal