CII Calls For Fuel-Excise Rollback as Private Capex Reaches Rs 7.7 Lakh Crore
CII sought fuel tax relief as private sector investments rose sharply.
Confederation of Indian Industry (CII) on Sunday said private sector capital expenditure in India surged 67 per cent year-on-year to Rs 7.7 lakh crore in September 2025, reflecting what it described as a strong revival in the country’s investment cycle. Alongside the data, the industry body proposed a five-point action agenda to help the economy navigate ongoing global uncertainties, including the energy disruptions linked to tensions in West Asia.
CII urged the government to gradually roll back the Rs 10-per-litre central excise duty cut on petrol and diesel over a period of six to nine months once crude oil prices stabilise. The industry chamber said the excise reduction had imposed a significant burden on government finances and argued that a phased reversal could help improve fiscal stability without creating sudden shocks for consumers or businesses.
According to CII’s analysis of nearly 1,200 companies from the CMIE Prowess database, manufacturing remained the largest contributor to private investment, accounting for Rs 3.8 lakh crore, or almost half of total capex. Sectors such as metals, automobiles and chemicals drove the increase, while the services sector contributed Rs 3.1 lakh crore, led by trading, communications and IT-enabled services.
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The industry body said several economic indicators pointed towards strengthening business activity across sectors. Capacity utilisation in manufacturing firms reportedly rose to 75.6 per cent in the third quarter of FY26, compared to 74.3 per cent in the previous quarter, while order books grew 10.3 per cent year-on-year. Bank credit growth also improved significantly, averaging close to 14 per cent in the second half of FY26 after remaining around 10 per cent during the first half.
Chandrajit Banerjee said Indian industry must actively contribute during a period of heightened global stress. As part of its recommendations, CII asked member companies to reduce fuel and power consumption by 3-5 per cent over the next two quarters through measures such as process optimisation, logistics efficiency, fleet electrification and increased use of renewable energy purchase agreements.
The five-point agenda also included proposals aimed at supporting smaller businesses and strengthening domestic supply chains. CII suggested that larger corporations voluntarily guarantee payments to MSMEs within 45 days using platforms such as TReDS and supply-chain financing tools. The organisation further recommended diversified sourcing strategies, strategic inventory buffers and deeper domestic manufacturing in areas including specialty chemicals, capital goods and industrial components to reduce vulnerability to global disruptions.
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