India’s first-half FY27 project commitments surged by 34.7%, primarily due to a dramatic rise in data centre investments, though broader economic activity remains uneven, with traditional sectors showing signs of slowdown.
India’s new project announcements jumped sharply in the first half of FY27, with a Bank of Baroda report showing commitments rising 34.7% to ₹30.38 trillion, the highest level in six years. The surge was driven overwhelmingly by information technology, where announced investment climbed to ₹9.46 trillion from just ₹0.70 trillion a year earlier, as companies raced to build data centres across the country.
The bank said that, without the IT surge, the broader investment picture looked much flatter. Announcements outside the technology sector fell about 4% to ₹20.92 trillion, while spending excluding both IT and electricity was almost unchanged from previous years at ₹11.77 trillion. That suggests the headline recovery is still heavily concentrated in a few infrastructure-linked segments rather than spreading evenly across the economy.
Power remained another major source of capital spending. The electricity sector almost doubled to ₹9.15 trillion in H1FY27, reflecting activity in both conventional and renewable energy projects, while manufacturing reached ₹8.18 trillion. Even so, manufacturing’s share of total announcements slipped to around 27%, its lowest level in four years. The report also noted that the private sector accounted for 86.3% of first-half announcements, based on CMIE data, underscoring how strongly investment remains driven by private firms.
By contrast, sectors that were once central to India’s project pipeline have lost momentum. Transport services, which led new announcements in H1FY24, fell sharply by H1FY27, and construction and real estate also returned to four-year lows. The Bank of Baroda report said investment decisions will increasingly depend on capacity utilisation, suggesting firms are still waiting for stronger demand before broadening their capital spending. That caution comes despite signs of enthusiasm in related markets: ANAROCK Research & Advisory has said data centres accounted for 29% of private equity inflows into Indian real estate in the first half of FY27, up from 4% in FY26, highlighting how the sector is drawing interest well beyond traditional lenders and industrial investors.
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