Business & Finance

India’s Private Firms Strengthen Balance Sheets, Attract Capital Across Key Sectors

By Dhirendra Kumar

India is experiencing a resurgence of private investment, as domestic companies have tightened their balance sheets and are drawing capital into areas such as renewable energy, semiconductors, pharmaceuticals, and aviation, Union Finance Minister Nirmala Sitharaman said at the Bloomberg New Economy Forum on Tuesday. "Today I can say with confidence that private capital is moving in. India's domestic private capital is moving in, and it's also attracting private capital from elsewhere," Sitharaman said, noting that companies are investing in sectors both within and outside their core businesses.

Sitharaman highlighted that after a difficult period following 2013‑14, when poor asset management and the inability of some firms to repay bank loans damaged corporate and banking balance sheets, many companies have since cleaned up their finances, cleared debt and built substantial cash reserves. Banking‑sector reforms have also addressed earlier balance‑sheet problems.

She cited renewable energy, semiconductor manufacturing and design, biosimilars, pharmaceuticals, generic drugs, and aircraft maintenance, repair and overhaul (MRO) facilities as key sectors attracting investment. The government promotes investment through the National Infrastructure Pipeline (NIP), the National Bank for Financing Infrastructure and Development (NaBFID), and the National Investment and Infrastructure Fund (NIIF). The NIP lists infrastructure projects from the Centre and states on a publicly accessible platform, allowing investors to search by sector and state. NaBFID provides patient capital for long‑term, high‑risk projects, while NIIF mobilises funds through investment vehicles focused on infrastructure and real‑estate development.

Sitharaman said the NIP has grown from projects worth about $2 trillion at its launch to more than $4.5 trillion, helping investors identify opportunities. She also noted India’s growing aviation market, which is creating opportunities for MRO facilities, and that Indian airlines have placed orders for new aircraft as the civil aviation sector expands at about 16% annually.

The minister emphasized the government’s efforts to attract long‑term capital into infrastructure and highlighted the importance of energy infrastructure as artificial intelligence and data centres require more electricity. She noted that India has attracted capital into semiconductor manufacturing, transmission lines, renewable energy, green hydrogen and green ammonia.

On semiconductors, Sitharaman said India is pursuing a strategy that includes less sophisticated chips used in everyday products such as refrigerators, cars and household devices connected through the Internet of Things, while also working toward more advanced chips.

Regarding the rupee, Sitharaman acknowledged significant depreciation over the past one‑and‑a‑half to two years and said the Reserve Bank of India is taking steps to curb volatility rather than defend a particular exchange rate. She added that the central bank’s efforts would continue and that India’s macroeconomic fundamentals remain sound.

Sitharaman said the government would maintain fiscal discipline without compromising welfare, education and healthcare spending. She also noted that debates around long‑term capital gains tax, securities transaction tax and the treatment of different asset classes are ongoing, and that the government would hear investors’ views during upcoming budget consultations, though she declined to indicate whether any changes would be made in the 2027‑28 budget.