India's Capex Cycle: A Reliable Hedge Amid Global AI Rush

India's capital expenditure cycle is gaining momentum through traditional sectors, offering a hedge against the global AI investment surge predicted for 2026. ICICI Securities' report highlights India's broad-based investment from utilities, energy, and industries, contrasting with the AI-driven US approach.

India's capital expenditure (capex) cycle is experiencing significant momentum, largely driven by traditional sectors, positioning the country as a hedge against the anticipated global AI investment surge pegged for 2026. This insight comes from an ICICI Securities report, which contrasts India's approach with the U.S., where private investments are predominantly focused on IT equipment and software.

The report stresses that India's capex story is deeply rooted in old-economy sectors, a factor that differentiates it from global trends and enhances the country's long-term investment prospects. Utilities, energy (excluding Reliance), metals, and industrial sectors are the foremost contributors to listed companies' capex, with utilities alone marking Rs 1.98 trillion.

This broad participation across sectors like healthcare, telecom, materials, and cement underscores India's ambition to build domestic capacities in critical areas, ensuring a sustainable investment path. Meanwhile, the U.S. sees a concerning concentration of capex in AI areas, raising potential exposure to sectoral risks, making India an appealing option for diversified global investment. (ANI)

(With inputs from agencies.)