Jairam Ramesh questions India's private investment slump as Indian groups commit billions to US
New Delhi, Sep 29 (UNI) Congress general secretary in-charge of communications Jairam Ramesh on Tuesday questioned the pace of private investment in India, contrasting the latest major investment announcement by the Essar Group in the United States with what he described as a continuing weakness in private capital formation at home.
In a post on X, Ramesh referred to US President Donald Trump's announcement of an $18 billion investment by Essar Group's US subsidiary Mesabi Metallics in an integrated iron and steel project linking an iron-ore mine in Minnesota with a new steel complex in Iowa. The project involves a proposed $15 billion steel complex in Iowa and about $3 billion in investment in the Minnesota mine and associated facilities.
"President Trump has just made an announcement of a $18 billion investment in the US iron and steel industry by the Essar Group," Ramesh said. He also referred to what he described as an earlier "jumbo investment apparently valued at $300 billion" by Reliance in the US petroleum refining industry and a $10 billion investment pledge by the Adani Group in the United States. Ramesh contrasted these overseas commitments with the investment environment in India. "On the other hand, private investment in India continues to struggle," he said, arguing that while investment announcements continued to be made and cash accumulated, private investment as a share of GDP remained weak.
He cited an August 2026 policy brief of the National Institute of Public Finance and Policy (NIPFP), Navigating India's Private Capex, to support his argument. Ramesh said the weakness persisted despite tax-rate cuts, record corporate profits and repeated government appeals to businesses to step up investment. According to Ramesh, the government was refusing to acknowledge three factors that he said were holding back private investment: stagnant real wages, which he argued were restraining consumption growth; an "atmosphere of fear and uncertainty" arising from the policies and actions of the Narendra Modi government; and widening income inequalities and concentration of ownership.
"These are the reasons that the Govt refuses to acknowledge," Ramesh said. He further cited the NIPFP brief as stating that "unfavourable market conditions" were the reported reason for two out of every three projects that were stalled or abandoned. Ramesh described the finding as indicative of what he called "the dire state of the Indian economy." The NIPFP's assessment, however, presents a more mixed picture of private investment. Its broader macroeconomic review has noted signs of a revival in private capital expenditure, with high-frequency indicators for private non-financial-sector capex recording more than 20 per cent nominal growth during the first three quarters of 2025-26, although the recovery weakened in the fourth quarter amid external shocks.
The institute has also pointed to a decline in the share of private investment in GDP over the longer term. The Essar announcement has meanwhile highlighted the scale of overseas investment being contemplated by major Indian business groups. Mesabi Metallics has said its proposed US project would establish an integrated supply chain from iron-ore mining in Minnesota to steel production in Iowa and generate thousands of jobs. Ramesh's remarks come amid a broader political and economic debate over the revival of private capital expenditure in India. The government has emphasised public infrastructure spending, tax reforms, corporate profitability and measures aimed at improving the investment climate as important drivers of economic growth and future private investment.
The Congress, however, has continued to argue that stronger private investment requires higher domestic consumption, improved household purchasing power and greater economic certainty. The contrasting investment announcements in the US and the uneven recovery of private capital expenditure in India have provided Ramesh with another opportunity to question whether the country's economic growth is translating into a sufficiently broad-based expansion of domestic private investment.
UNI SKA NST
