Kalki expects investment in emerging areas to accelerate as companies expand production capacity and introduce new technologies. While India may not yet see the scale of AI infrastructure spending seen in the US, investment in AI applications, data centers, and related services is likely to pick up pace and support the next phase of the capex cycle.
Optimism is growing as business investment continues to grow faster than the overall economy. Kalki said capital investment by listed companies will reach around Rs 13 trillion in financial year 2025-26 (FY26), representing a growth of around 14 per cent in real terms.
“If you look at the latest GDP figures themselves, gross fixed capital formation was the driver of growth,” he said.
Kalki pointed out that the revival in investment is no longer limited to sectors such as utilities, industrials and metals. Discretionary consumption, healthcare, and auto accessories companies are also increasing capital spending, even though these businesses are not traditionally capital-intensive.
Kalki said India has little progress in building the large-scale AI infrastructure seen in the US, where spending on AI data centers and computing power is a key growth driver. However, he believes that India is well-positioned to benefit from the adoption and commercialization of AI technology.
“AI infrastructure may not exist, but AI applications do,” Kalki said, pointing to investments in data centers and AI-related opportunities by IT services companies, telecom companies and industrial companies.
He added that data centers are emerging as a key investment topic as companies look to support digital infrastructure and growing computing requirements. Several publicly traded companies have announced investments in data centers or established themselves within the ecosystem by providing equipment and services.
Kalki expects capital investment growth to slow after several years of rapid expansion. He said concerns about weather-related risks and the possibility of a strong El Niño event could lead to more resources being directed to areas such as food and fertilizer subsidies.
But he believes the government’s focus on strategic areas will remain intact.
“The focus on national investment towards self-reliance across key sectors in terms of energy, power and defense will continue,” Kalki said.
For the full interview, watch the accompanying video
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