Archive · 29 Sep 2026
Indian Overseas Investments Highlight Domestic Private Capital Weakness Debate
Jairam Ramesh asked why Indian companies are announcing very large projects in the United States while private investment in India remains uneven.
Essar Group’s subsidiary plans to spend $18 billion on an iron and steel project.
The project connects an iron-ore mine in Minnesota with a steel complex in Iowa.
Ramesh said private investment in India has struggled even after tax cuts and strong company profits.
He argued that low wage growth, uncertainty about government policies, and inequality are discouraging investment.
A government-backed research institute reported that private investment’s share of India’s economy has fallen over many years.
The institute also found signs of a recent recovery that weakened later.
The project is expected to create more than 8,000 permanent and construction jobs in the United States.
The disagreement is about whether India’s economy is suffering from serious investment problems or is gradually recovering through public spending and policy measures.
Jairam Ramesh contrasted Essar Group’s planned $18 billion United States steel investment with weak private investment in India.
The Essar project includes a $15 billion steel complex in Iowa and roughly $3 billion for a Minnesota iron-ore mine and related facilities.
Ramesh also cited announced United States investments involving Reliance and the Adani Group, valued at about $300 billion and $10 billion respectively.
He blamed India’s investment weakness on stagnant real wages, policy uncertainty, and rising income inequality and ownership concentration.
The National Institute of Public Finance and Public Finance and Public Policy reported both a decline in private investment’s GDP share and a mild, uneven recent revival.
- Who
- Congress general secretary Jairam Ramesh, Essar Group’s subsidiary Mesabi Metallics, and Indian business groups including Reliance and the Adani Group.
- What
- Ramesh questioned weak and uneven private investment in India while Indian groups announced major investments in the United States.
- When
- The remarks were made on Tuesday; the cited National Institute of Public Finance and Public Policy brief is dated August 2026.
- Where
- The announced Essar project would span an iron-ore mine in Minnesota and a steel complex in Iowa, while the investment debate concerns India.
- Why
- Ramesh said weak wages, policy uncertainty, and inequality are discouraging domestic investment; the government and its supporters attribute future expansion to infrastructure spending, profitability, tax reforms, and investment-climate measures.
Criticism of Domestic Investment Conditions
Government Case for Economic Recovery
State of private investment
Criticism of Domestic Investment Conditions
Jairam Ramesh said private investment in India continues to struggle and that its declining GDP share shows serious economic weakness.
Government Case for Economic Recovery
The National Institute of Public Finance and Public Policy reported a mild recent revival, although it said the recovery was uneven and later weakened.
Reasons for weak investment
Criticism of Domestic Investment Conditions
Ramesh attributed the problem to stagnant real wages, policy-related fear and uncertainty, and increasing income inequality and ownership concentration.
Government Case for Economic Recovery
The government and its supporters point to infrastructure spending, corporate profitability, tax reforms, and measures intended to improve the investment climate.
Role of public investment
Criticism of Domestic Investment Conditions
Ramesh argued that large overseas commitments by Indian groups contrast with insufficient domestic private capital formation.
Government Case for Economic Recovery
The government has relied heavily on public investment while presenting it as a driver of growth and a means of encouraging future private-sector expansion.
- Essar investment
- Mesabi Metallics announced an $18 billion integrated iron and steel project in the United States.
- Project breakdown
- The plan includes a $15 billion steel complex in Iowa and about $3 billion for a Minnesota mine and related facilities.
- Expected jobs
- The project is expected to create more than 8,000 permanent and construction jobs.
- Other cited investments
- Ramesh referred to an approximately $300 billion Reliance announcement and a $10 billion Adani Group pledge in the United States.
- Private investment share
- The National Institute of Public Finance and Public Policy said India’s private investment share of GDP fell from 27.5% to 24% over roughly 15 years.
- Recent trend
- Private non-financial-sector capital expenditure grew by more than 20% in nominal terms during the first three quarters of FY2025-26, before weakening sharply in the fourth quarter.
- Stalled projects
- Ramesh said the institute found unfavorable market conditions were cited in two out of every three stalled or abandoned projects.