After years of lull, India Inc was witnessing the return of the investment cycle, and substantial investments in the manufacturing sector were expected to be announced after another two quarters of growth, industry captains said at the India Economic Summit on Monday.

Investments would be required to shore up production not only because of domestic demand, but exports would also drive growth, said Omkar Goswami, chief economist of the Confederation of Indian Industry, at the session on manufacturing. He said exports growth would come primarily in four key areas: automobile components, some segments of the automobile industry, including two-wheelers, pharmaceuticals and steel.

Several key industrialists and senior executives, including Rahul Bajaj of Bajaj Auto, Yogi Deveshwar of ITC, Adi Godrej of Godrej Industries, Sanjeev Goenka of the RPG group and Carlo M Donati of Nestle India, said demand would spurt in the next few months as rural consumers spent more following a good monsoon.

"We are expecting sales of soaps and detergents to grow around 10-12 per cent this year, compared with a decline last year, as demand grows in the next two months. And we expect demand to grow further," Godrej told Business Standard.

Baba Kalyani, chairman of automobile component manufacturer Bharat Forge, said he expected exports demand to pick up over the next few months. The car manufacturing industry is planning to invest around $400 million in the next 1-2 years.