Standard Chartered Bank economists Saurav Anand and Anubhuti Sahay report a sharp slowdown in India's new investment announcements for March, attributing the decline primarily to the Middle East conflict and sector-specific issues in renewable electricity and chemicals [1]. New investment announcements plunged 90% year-on-year in March, with sentiment soured by the ongoing conflict [1]. However, the economists note that not all of the decline was due to the Middle East war, as February also saw significantly weak numbers, mainly led by softness in the renewable electricity generation and chemical sectors [1]. These two sectors, which typically contribute about 40% of new project announcements in the March 2025 quarter, experienced notable weakness, resulting in a 57% year-on-year contraction in new announcements for the March quarter—the weakest since 2021, when COVID impacted investment activity [1].
Projects under implementation (PUI) were distorted by technical reclassification, making it difficult to draw direct correlations between new announcements and implementation, especially for the March quarter, as large announcements are often made during investment summits [1]. Despite the subdued outlook, a key positive was observed: project completions surged in the March quarter, reaching their second-highest quarterly total ever, only surpassed by the pre-election quarter of March 2024 [1].
The overall investment outlook remains subdued due to external sector uncertainty and demand risks, with Standard Chartered economists cautioning that slower new announcements could potentially impact future projects under implementation, although the correlation is not particularly strong for this period [1].
CONCLUSION
India's investment landscape faces significant headwinds, with new project announcements sharply declining due to external risks and sectoral softness. Despite this, robust project completions provide a partial offset. The subdued outlook suggests caution for future investment momentum, especially amid ongoing external uncertainties.