The Daily Brief Is there a private capex crisis in India?
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Oct 14, 2025 The discussion explores the slowdown of India's growth engine and the critical state of private capital expenditure. Key factors like corporate risk aversion and weak demand are highlighted as constraints on investment. The challenges facing the Indian tea industry are also examined, revealing significant cash losses and export disruptions. Erratic weather and rising costs further threaten tea production. Lastly, brief updates on TCS's data center equity plans and other market reforms add intriguing insights to the conversation.
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Private Capex Is Nominally High But Weak Relative To GDP
- Private capex is at record nominal levels but low as a share of GDP, signaling a relative retreat by firms.
- This decline started after 2012 and reflects the end of the last big capex cycle and slower private investment growth.
Past Debt Crisis Made Corporates Twice-Shy
- The 2010s twin balance-sheet crisis scarred corporate risk appetite and encouraged deleveraging over expansion.
- Firms now prefer completing projects and staying conservative despite healthier balance sheets.
Finance Isn't The Main Barrier To Investment
- Credit availability and interest costs are not the binding constraints for capex today.
- Large companies access bank and market funding, so firms are deliberately choosing not to lever up.