The Confederation of Indian Industry (CII) has unveiled a comprehensive five-point action plan designed to assist India in navigating the ongoing West Asia crisis. A key proposal from the industry body is the gradual restoration of excise duties on petrol and diesel, which had previously seen a Rs 10 per litre reduction.
Strategic Measures for Economic Stability
CII's recommendations emphasize a phased withdrawal of fuel excise cuts over a period of six to nine months, aligning with the stabilization of global crude oil prices. This initiative is part of a broader strategy that also includes:
- A voluntary industry-led energy conservation drive, urging companies to reduce fuel and power consumption by 3-5% over the next two quarters through measures like logistics optimization, fleet electrification, and increased use of renewable energy.
- A 45-day payment guarantee for Micro, Small, and Medium Enterprises (MSMEs) by larger corporates, leveraging platforms like TReDS and supply-chain finance to alleviate working capital stress during global volatility.
- Deeper supply-chain localization, promoting strategic inventory buffers, diversified sourcing, and greater domestic value addition in critical sectors such as speciality chemicals, components, and capital goods.
- Front-loading of private investments for the upcoming fiscal year (FY27) in manufacturing, energy transition, and digital infrastructure, coupled with voluntary price restraint on essential inputs and increased internship hiring under the PM Internship Scheme.
Surge in Private Capital Expenditure Signals Revival
The proposals arrive as India witnesses a robust revival in its investment cycle. According to CII, India's private capital expenditure soared by 67% year-on-year, reaching Rs 7.7 lakh crore in September 2025, up from Rs 4.6 lakh crore a year prior. This significant increase is seen as a clear indicator of a broad-based economic recovery.
Chandrajit Banerjee, Director General of CII, stated, "The 67 per cent jump in private capex to Rs 7.7 lakh crore is, by some distance, the most important signal yet that India’s investment cycle has decisively turned."
Manufacturing and Services Lead Growth
CII's analysis, based on nearly 1,200 companies from the CMIE Prowess database, highlights that manufacturing contributed substantially to this capital expenditure, accounting for Rs 3.8 lakh crore. Key drivers within manufacturing included metals, automobiles, and chemicals. The services sector also played a vital role, contributing Rs 3.1 lakh crore, led by trading, communications, and IT/ITeS.
Capacity utilization in manufacturing firms saw an increase to 75.6% in the third quarter of FY26 from 74.3% in the previous quarter, with order books expanding by 10.3% year-on-year. Furthermore, bank credit growth averaged close to 14% in the latter half of FY26, compared to approximately 10% in the first half.
Industry-Government Partnership for Resilience
Banerjee affirmed the industry's readiness to share the burden during the current period of global uncertainty. He emphasized that these five suggestions represent a concrete partnership offer from the industry to the government, aimed at maintaining economic stability and growth momentum.
CII attributed the positive investment environment to the government's supportive policy framework and public capital expenditure push. They cited initiatives such as GST reforms, PM Gati Shakti, Production Linked Incentive schemes, labor codes, free trade agreements, and the PM Internship Scheme as crucial factors boosting investor confidence. Strong macroeconomic indicators, including an average GDP growth of 7.3% over the past three years, easing inflation, forex reserves exceeding $700 billion, and record exports of $863 billion in FY26, further underscore this positive trend.
Despite spillover risks from the West Asia crisis posing near-term challenges, CII believes that enhanced industry-government coordination will be instrumental in safeguarding India's growth trajectory.