While global markets navigate uncertainty, India’s mergers and acquisitions landscape is thriving. In 2025, the country will have emerged as one of the world’s most dynamic dealmaking destinations, backed by strong fundamentals and strategic advantages.

Record-Breaking Performance

India’s M&A market hit a three-year high in Q1 2025, recording 669 transactions worth $29 billion—the strongest quarterly performance since early 2022. The first half of 2025 saw deal values reach $50 billion, with ten deals crossing the billion-dollar mark. This momentum continued into Q3, with M&A activity surging 37% to $26 billion, up from the same period in 2024.

These numbers reflect more than a cyclical upturn. They signal India’s transformation from an emerging market into an essential component of global investment strategies.

What’s Fueling the Boom?

Strong Economic Foundation: India is on track to become the world’s fourth-largest economy, with GDP growth projected at 6.7% by 2027. This combination of scale and growth is increasingly rare among major economies, making India an attractive destination for long-term capital.

Domestic Confidence: Perhaps most telling, domestic deals accounted for 72% of Q1 volumes, rising to 86% in the first half of 2025. Indian companies are consolidating and expanding, betting on the potential of their home market. Strategic acquisitions, such as Bajaj Group’s $2.7 billion stake purchase in Bajaj Allianz Insurance, exemplify this confidence.

Sector Diversity: Unlike markets dominated by a single industry, India offers multiple entry points. The energy sector led with $7.3 billion in Q1 deals—a fifteenfold increase—driven by renewable energy targets. India now ranks as the world’s fourth-largest renewable energy market with 220 gigawatts of installed capacity. Financial services recorded $5.2 billion in deals, while technology, manufacturing, and consumer sectors remained consistently active.

Strategic Advantages

Geopolitical Positioning: Global supply chain diversification is working in India’s favor. Companies implementing China Plus One strategies are increasingly choosing India as their alternative manufacturing base, attracted by the country’s scale, talent pool, and improving infrastructure.

Regulatory Clarity: The government has introduced reforms balancing market openness with appropriate oversight. The 2025 budget raised the FDI limit for insurance to 100%, launched a National Manufacturing Mission, and incentivized private-sector participation in infrastructure. New Competition Commission regulations provide clearer frameworks for large transactions, particularly in technology and pharmaceuticals.

Infrastructure Investment: India is investing approximately 1.7% of GDP in transport infrastructure—double the rate of the US and most European countries. The country has also emerged as the second-largest data center market in Asia-Pacific after China, with major investments from Microsoft Azure and Google Cloud.

Manufacturing Renaissance: Programs such as Make in India and Production-Linked Incentive schemes across 14 sectors are revitalizing manufacturing. Apple’s iPhone production in India surpassed $10 billion in 2024, illustrating the country’s growing manufacturing capabilities.

Private Equity’s Role

Private equity and venture capital firms maintain strong positions, with substantial dry powder to deploy. Their presence provides market liquidity and supports exits for earlier investors, creating a healthy ecosystem that encourages innovation and entrepreneurship.

Looking Forward

Market analysts project M&A deal values to grow from $110 billion in 2024 to between $130-160 billion in 2025. This optimism stems from normalizing interest rates, institutional capital seeking deployment, and—most importantly—India’s compelling fundamentals: favourable demographics, digital transformation, and ongoing economic reforms.

Challenges exist, including potential impacts from US tariffs and occasional valuation gaps between buyers and sellers. However, these haven’t dampened enthusiasm for Indian assets. Instead, they’re driving more sophisticated deal structures and stronger partnerships.

The Bottom Line

India’s M&A resilience in 2025 isn’t accidental. It’s the result of converging factors: robust economic growth, proactive regulatory reforms, sector diversity, strategic geopolitical positioning, and sustained infrastructure investment. For strategic acquirers, India offers access to massive consumer markets. For financial sponsors, it provides high-growth opportunities across multiple sectors. For Indian companies, the environment facilitates consolidation and international expansion.

India has moved beyond being a promising emerging market to become an indispensable part of global investment portfolios. The question for dealmakers worldwide is no longer whether to engage with India, but how to capitalize on what may be one of the decade’s most compelling investment stories.