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New-age industries fuelling India’s capex cycle

By Sohail Khan 11 September 2026, 12:30 pm

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Business News›Industry›Banking/Finance›Banking›New-age industries fuelling India's capex cycle, says SBI chief

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New-age industries fuelling India's capex cycle, says SBI chief
Synopsis

Corporate spending on infrastructure projects is increasing across India. New sectors like data centers and green hydrogen are driving credit demand. Companies are increasing capital expenditure due to better demand and growth prospects. Bank lending has grown significantly as companies prefer loans over bonds. State Bank of India is deploying liquidity from diaspora deposits to support lending.

India growth story - green hydrogen, electric vehicles and data centres are powering capex cycle — Green hydrogen, electric vehicles and data centres are powering capital expenditure cycle (AI-generated image)

Corporate spending on large infrastructure projects is picking up in India, with new-age sectors such as data centres, green hydrogen and electric vehicles emerging as important drivers of credit demand, Ashwini Kumar Tewari, managing director at State Bank of India Ltd., told Bloomberg Television in an interview.

“Considering the fact that Indians are one of the largest consumers of data in the world, and the data is pretty cheap, I think we have a need for a lot more data centers, which is why the demand is there,” Tewari said.

India is also moving to strengthen its position as an attractive destination for data centre investments. The country has proposed easing conditions related to a tax holiday for Indian data centre services, as opposition to such infrastructure grows in the US and some other markets.

Gautam Adani has outlined plans to invest $100 billion in AI-ready data centres by 2035, while Mukesh Ambani’s conglomerate Reliance Industries plans to invest as much as $110 billion over seven years in artificial intelligence-related infrastructure.

Earlier this year, India passed a law exempting foreign cloud service providers from tax until 2047 if they use Indian-owned data centres for global operations. Hyperscalers such as Amazon.com Inc. are also looking to establish data centres in the country, with government regulations requiring Indian data to be stored locally, Tewari told Bloomberg.

India’s broader corporate investment cycle is also gathering momentum as healthier balance sheets, better demand visibility and stronger growth prospects prompt companies to increase capital expenditure. The sustained capex cycle has, in turn, boosted credit demand and opened up another avenue of growth for banks.

SBI, which accounts for about a quarter of India’s loan market, is witnessing investment activity across sectors including power, real estate, steel, automobiles and hotels, Tewari said. Credit growth, he added, remains “very strong” across segments.

Bank lending in India grew 19% year-on-year in July, as companies increasingly turned to bank loans instead of bonds because of lower borrowing costs. SBI, which had assets worth ₹76.6 trillion ($803 billion) as of June 30, is widely seen as a bellwether for the Indian economy.

Tewari, who has spent more than three decades with the lender, said funds mobilised through foreign currency non-resident (FCNR) bank deposits will be used to replace high-cost deposits and borrowings, while also supporting lending.

India recently raised a record $127 billion from its diaspora through FCNR bank deposits under the central bank’s special window, aimed at supporting the rupee after it hit record lows.

SBI expects to be able to deploy the liquidity over the next one to two years, Tewari said.

(With inputs from Bloomberg)

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