India is witnessing a resurgence in private investment, as domestic companies enhance their balance sheets and draw in capital across various sectors. Union Finance Minister Nirmala Sitharaman announced this trend during the Bloomberg New Economy Forum held on Tuesday. She stated that there is a notable influx of private capital, both from within India and from international sources, into sectors such as renewable energy, semiconductors, pharmaceuticals, and aviation.

Sitharaman highlighted the expanding aviation market, which is generating significant investment opportunities, particularly in Maintenance, Repair, and Overhaul (MRO) facilities. She noted that Indian airlines have made substantial orders for new aircraft, reflecting the rapid growth of the civil aviation sector, which is expanding at a rate of approximately 16%, outpacing global growth rates.

According to Sitharaman, estimates suggest that India could receive a new aircraft every week until 2030, indicating robust demand in the aviation industry. This growth presents a favourable environment for private investment, as companies explore opportunities both within their primary business areas and in adjacent sectors.

Government Initiatives to Attract Long-Term Capital

The government is actively working to attract long-term capital for infrastructure projects through initiatives such as the National Infrastructure Pipeline (NIP), the National Bank for Financing Infrastructure and Development (NaBFID), and the National Investment and Infrastructure Fund (NIIF). Sitharaman explained that the NIP, which was launched in 2019, serves as a publicly accessible platform where various infrastructure projects are listed for potential investors.

Since its inception, the NIP has expanded from approximately $2 trillion in projects to over $4.5 trillion, enabling investors to search for opportunities by sector and state. This comprehensive pipeline has proven beneficial for investors seeking to identify viable projects. NaBFID plays a crucial role by providing patient capital for high-risk, long-term infrastructure developments, while the NIIF focuses on mobilising funds through investment vehicles aimed at infrastructure and real estate.

Over the last decade, India has made considerable advancements in infrastructure, including roads, ports, airports, and digital connectivity. Sitharaman emphasised the government’s commitment to maintaining this momentum and enhancing infrastructure across various sectors, particularly in energy, as the demand for electricity rises with the growth of AI and data centres.

Focus on Semiconductor Manufacturing and Currency Stability

Sitharaman addressed the government’s strategy in semiconductor manufacturing, which encompasses not only advanced chips but also less sophisticated ones essential for everyday products. She remarked that while India aims to develop cutting-edge nano chips, it is equally important to produce simpler chips that are vital for both the Indian and global economies.

On the topic of currency stability, Sitharaman acknowledged the significant depreciation of the Indian rupee over the past one-and-a-half to two years. She clarified that the Reserve Bank of India (RBI) is focused on reducing volatility rather than fixing a specific exchange rate. The RBI’s ongoing measures aim to stabilise the currency amidst external pressures, while she assured that India’s macroeconomic fundamentals remain robust.

As preparations for the Union budget for 2027-28 are underway, Sitharaman noted the ongoing discussions surrounding long-term capital gains tax, securities transaction tax, and the treatment of various asset classes. While these topics have been widely debated among investors, she refrained from indicating whether any changes would be made in the upcoming budget, highlighting the importance of such discussions.

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