While the global investment spotlight remains fixated on Artificial Intelligence (AI)—driving a tech-heavy capital expenditure surge in the United States—India is carving out a unique, more sustainable growth path, according to a recent analysis by ICICI Securities.
The report suggests that India’s robust capital expenditure (capex) cycle is being overwhelmingly powered by traditional, or “old-economy,” sectors, effectively positioning the country as a crucial “hedge” against the potential volatility of the global AI investment wave, which is forecast to peak around 2026.
Unlike the US, where private investment is increasingly dominated by spending on IT equipment and software, India’s investment narrative is broad-based. It is focused on strengthening domestic capacity in physical infrastructure and core industries, offering a stark contrast to the AI-centric growth seen elsewhere. This widespread sectoral participation ensures a more resilient and less concentrated investment upcycle, reducing the kind of sectoral risk currently facing economies overly reliant on the technology boom.
Core Sectors Fueling the Investment Surge
The ICICI Securities study highlights that the biggest capital expenditure contributors among listed companies are core industries, signaling a massive push toward structural economic build-out. The sectors representing the “old economy” and driving this boom are diverse, with Utilities leading the charge, recording a capex of approximately ₹1.98 trillion. This is closely followed by the Energy sector (excluding Reliance Industries) at ₹1.4 trillion, and the Metals sector, which contributed ₹1.1 trillion to the investment cycle.
In addition to these heavyweights, the report notes that several other “old economy” segments are also adding meaningfully to the investment momentum, including Industrials, Healthcare, Telecom, Materials, and Cement.
This investment is flowing into fundamental areas like the energy transition, defence manufacturing, processing of rare earth materials, and the expansion of national infrastructure and digital public platforms. The focus on these diverse, traditional sectors is expected to provide sustained momentum to India’s overall investment rate in the coming years, supporting stable economic growth.
