New Delhi: Private sector capital expenditure plans have dropped for the second quarter in a row in the October and December 2025 period – Q3FY26 – even as government projects showed an uptick after six months of decline, lifting the overall new investment plans above Q2 levels to Rs 15.7 trillion, data from investment monitoring firm Projects Today showed, as reported by Business Standard.Global headwinds have made promoters cautious, suggesting that public capex may need to do the heavy lifting for some more time.The overall uptick comes after a sharp 20.8% decline in project investments during Q2FY26 compared to Q1. Meanwhile, after four successive quarters of sequential growth (Q2 FY25 to Q1 FY26), new private capex plans have steadily declined in the last two quarters. According to the report, this marks a clear divergence in the investment momentum in the private and public sectors.“New government investment projects rose 26.5% quarter-on-quarter to hit Rs 5.64 trillion in Q3, lifting the public sector’s share of new proposals to nearly 36 per cent from under 30 per cent in Q2,” it stated.Of these, Union government outlays increased by 39.51% to 2.89 trillion, driven by big announcements with average project values up to Rs 438 crore per project. State government capex plans also rose by 15.28% to over 2.75 trillion in Q3.Meanwhile, private sector plans fell 4.61% quarter-on-quarter in Q3, on top of a 21.83% sequential contraction in Q2, the data showed. Of these, domestic investors pulled back more sharply as commitments by private Indian companies dropped 15.6% to Rs 7.76 trillion, shrinking their share of fresh investments to 49.4% from 61.2% in Q2.Fresh private outlays, as a result, decreased to Rs 10.06 trillion, with new private projects dipping 2.3% to 1,757. Foreign investors, however, cushioned the impact at the top end with their fresh investment surging 69.3% to Rs 2.3 trillion.“While domestic macro conditions remain supportive, often described as a Goldilocks phase with stable demand and manageable inflation, private promoters’ willingness to commit to large new capex may remain cautious in the near term. Global headwinds, including renewed tariff-related risks, geopolitical uncertainty and a softening export environment, are likely to keep risk appetite restrained and delay investment decisions in private-led sectors,” said Shashikant Hegde, Projects Today director and CEO, as quoted by Business Standard.New manufacturing outlays fell 3.3% quarter-on-quarter to Rs 24.47 trillion in Q3, with project numbers down 10.2%. Declines in steel, cement and automobiles outweighed gains in pharmaceuticals, electronics and defence. Mining and electricity investments also contracted sharply, led by a slowdown in solar and wind projects. In contrast, infrastructure spending surged 40.2% to Rs 27.56 trillion, boosting its share of new outlays to 48.2%, while irrigation projects saw a ten-fold rise off a low base, according to the report.As per Hegde, the rebound in infrastructure is a positive sign. On Union Budget expectations, he told the daily that any meaningful increase in infrastructure outlays for FY27 could help crowd in private investment in upcoming quarters.