Introduction
India has steadily evolved into one of the fastest-growing major economies, offering a vibrant and welcoming environment for investors from around the world. In FY 2025–26, Real GDP (GDP at Constant Prices) is estimated to reach Rs. 201.90 lakh crore (US$ 2.24 trillion), rising from the provisional level of Rs. 187.97 lakh crore (US$ 2.26 trillion) in FY 2024–25, reflecting a robust growth of 7.4%. At current prices, Nominal GDP is projected to reach Rs. 357.14 lakh crore (US$ 3.96 trillion) in FY 2025–26, from Rs. 330.68 lakh crore (US$ 3.98 trillion) in the previous year, registering a growth of 8.0%.
India’s investor base has expanded rapidly, reflecting deeper financial inclusion and growing participation across regions. During FY26 (up to December 2025), 2.35 crore demat accounts were added, taking the total number of demat accounts beyond 21.6 crore, while the number of unique investors crossed 12 crores in September 2025, with women accounting for nearly one-fourth of this base. Mutual fund participation has also strengthened, with 5.9 crore unique investors as of December 2025, including 3.5 crore from non-Tier I and Tier II cities, highlighting a widening geographic reach. At the same time, the unique investor base contributing through systematic investment plans (SIPs) has grown sharply from about 3.1 crore in FY20 to over 11 crores by FY25, underscoring the shift toward long-term, disciplined investing.
Market Activity
Real Gross Value Added (GVA) is estimated at Rs. 184.50 lakh crore (US$ 2.04 trillion), up from Rs. 171.87 lakh crore (US$ 2.07 trillion) in FY 2024–25, indicating a growth of 7.3%, while Nominal GVA is expected to expand to Rs. 323.48 lakh crore (US$ 3.59 trillion) from Rs. 300.22 lakh crore (US$ 3.62 trillion), marking a growth of 7.7%. Collectively, these trends highlight India’s position as one of the fastest-growing major economies, supported by broad-based expansion across sectors.
India registered 301 Private Equity (PE) deals worth Rs. 49,745 crore (US$ 5.7 billion) in Q3 2025, recording a 7% rise over the previous quarter. India-focused PE-VC funds raised Rs. 21,576 crore (US$ 2.47 billion) across 22 funds, a 148% YoY increase, driven by strong inflows into the IT & ITeS sector (US$ 2.4 billion). Mumbai led in investment value, while Bangalore topped in deal volume, reaffirming their positions as India’s leading investment hubs.
On the FDI front, according to the Department for Promotion of Industry and Internal Trade (DPIIT), India's cumulative FDI inflow stood at Rs. 99,08,749 crore (US$ 1.12 trillion) between April 2000-September 2025.
From April 2000-September 2025, India's service sector attracted the highest FDI equity inflow of 16% amounting to Rs. 8,09,564 crore (US$ 123.94 billion), followed by the computer software and hardware industry at 16%, amounting to Rs. 8,62,922 crore (US$ 119.74 billion), trading at 6% amounting to Rs. 3,58,667 crore (US$ 50.35 billion), telecommunications at 5% amounting to Rs. 2,41,901 crore (US$ 40.16 billion), and automobile industry at 5% amounting to Rs. 2,62,237 crore (US$ 39.43 billion).
India also had major FDI inflows during April 2000-September 2025, coming from Singapore at Rs. 13,21,127 crore (US$ 186.82 billion) with a total share of 24%, followed by Mauritius at 24% with Rs. 11,22,807 crore (US$ 183.66 billion), the USA at 10% with Rs. 5,50,451 crore (US$ 77.27 billion), the Netherlands at 7% with Rs. 3,77,095 crore (US$ 54.93 billion), and Japan at 6% with Rs. 2,93,864 crore (US$ 45.61 billion).
India’s SME IPO market witnessed exceptional depth and breadth in 2025, reflecting strong risk appetite and widening participation across sectors such as manufacturing, logistics, healthcare, technology, FMCG, and services. 268 SME IPOs were launched during the year, collectively mobilising around Rs. 12,112 crore (US$ 1.39 billion), underscoring the growing role of capital markets in funding small and mid-sized enterprises.
Recent Developments/Investments
Recent speedy infrastructure investments, the inclusion of more sectors under the PLI scheme, an increase in public investments, and increasing PE/VC activity have led to plenty of investments in the Indian market. A stabilizing economic backdrop and financial oversight have provided investors with a perfect opportunity to invest in the country and have made India a rising economic powerhouse. Some of the recent investments and developments in this space are as follows:
- During October–December 2025, India’s mutual fund industry continued its upward trajectory, with Average Assets under Management (AAUM) (excluding Fund of Funds–Domestic but including Fund of Funds–Overseas) rising to Rs. 81.01 lakh crore (US$ 9.76 trillion), reflecting sustained investor participation and steady market conditions. Fund of Funds–Domestic AAUM stood at Rs. 1.71 lakh crore (US$ 0.21 trillion), indicating growing interest in diversified and international investment avenues. The industry remained led by large fund houses such as SBI Mutual Fund, ICICI Prudential Mutual Fund, HDFC Mutual Fund, Nippon India Mutual Fund and Kotak Mahindra Mutual Fund, underscoring continued preference for established asset managers and reinforcing the deepening financialisation of household savings in India.
- India’s mutual fund industry continued to demonstrate strong expansion, with AAUM reaching Rs. 81.99 lakh crore (US$ 0.99 trillion) in December 2025, while total AUM stood at Rs. 80.23 lakh crore (US$ 0.97 trillion). The industry’s AUM has grown more than six-fold over the past decade and nearly three-fold in the last five years, underscoring rising household participation, deepening financialisation of savings, and sustained investor confidence in capital markets.
- For FY26, the electronics and IT hardware sector received the highest PLI budget allocation at Rs. 9,000 crore (US$ 1.02 billion), followed by automobiles and auto components received Rs. 2,818.85 crore (US$ 318 million) and pharmaceuticals received Rs. 2,444.93 crore (US$ 275.9 million). The increased outlay underscores the government’s continued push to boost domestic manufacturing and high-value sectors.
- Total outstanding NRI deposits reached Rs. 14,15,761 crore (US$ 164.7 billion) at the end of March 2025, compared to Rs. 13,05,732 crore (US$ 151.9 billion) at the same time last year. Sequentially, outstanding deposits were at Rs. 13,78,197 crore (US$ 160.33 billion) in February 2025.
- India’s deal activity reached a new milestone in 2025, with nearly 2,500 M&A and private equity (PE) transactions aggregating Rs. 8.05 lakh crore (US$ 97 billion), marking the highest deal volumes on record and the third-highest deal values historically. Private equity accounted for 61% of deal volumes, while M&A contributed 62% of total deal value, driven by a surge in large strategic transactions. According to Grant Thornton Bharat’s 2025 Dealtracker report, deal volumes rose 41% year-on-year, while values increased by 36%, reinforcing confidence in India’s long-term growth fundamentals.
- According to the recent report by Stockholm International Peace Research Institute (SIPRI), In 2024, India ranked as the world's fifth-largest military spender, allocating Rs. 7,63,018 crore (US$ 86.1 billion) towards modernizing various weaponry and combat systems.
- In India, co-working spaces such as Urban Vault, Incuspaze, The Executive Centre, and Awfis are increasing their investments in ESG (Environmental, Social, and Governance) practices to cater to the rising need for eco-friendly workplaces. Urban Vault, headquartered in Bengaluru, experienced a 41% rise in leasing activity for ESG-certified properties in the latter part of the fiscal year 2024.
- Top M&A Deals in 2025:
- Emirates NBD Bank acquired a controlling stake in RBL Bank through a primary capital infusion of Rs. 26,850 crore (US$ 3.0 billion). The transaction represents the largest foreign direct investment in Indian financial services, and the largest equity fundraise by an Indian bank and includes a mandatory open offer to public shareholders.
- In December 2025, Reliance Industries completed the merger of Star Television Productions Ltd (STPL) into Jiostar India Private Ltd, consolidating the ‘STAR’ brand within its media joint venture with The Walt Disney Company.
- September 2025 marked a landmark development in India’s banking sector with Japan’s Sumitomo Mitsui Banking Corporation (SMBC) completing the acquisition of a 20% stake in Yes Bank. The transaction made SMBC the largest shareholder in Yes Bank and represents the largest cross-border investment in an Indian private sector bank to date.
- In September 2025, Amazon completed the acquisition of Axio (formerly Capital Float) following approval from the Reserve Bank of India, making it one of Amazon’s largest acquisitions in the country. The deal integrates Axio’s digital lending and checkout finance capabilities, used to power Buy Now Pay Later services for Amazon Pay and serving over 10 million customers, with Amazon’s technology, reach, and bank partnerships.
- Jio Financial Services Limited (JFSL) and Allianz of Germany have incorporated a joint venture company, Allianz Jio Reinsurance Limited (AJRL), to operate in the Indian reinsurance sector.
- On October 15, 2025, Chennai-based Trusted Aerospace Engineering (TASE Global) completed the acquisition of US-based Joined Alloys for Rs. 106 crore (US$ 12.7 million), strengthening its aerospace manufacturing and special processes capabilities. The acquisition expands TASE Global’s footprint in North America and enhances its access to advanced aerospace fabrication, serving regulated industries including the US Department of Defense.
- In July 2025, logistics major Delhivery completed the acquisition of Ecom Express for up to Rs. 1,407 crore (US$ 170 million), marking a significant consolidation in India’s parcel delivery market. The transaction closed on July 18, with financials to be consolidated from the closing date, while operational integration is underway and expected to be completed over the next six months.
- In June 2025, Torrent Pharmaceuticals acquired J B Chemicals & Pharmaceuticals for Rs. 26,595 crore (US$ 3 billion). The transaction strengthened Torrent’s position in the Indian pharmaceutical market. (Domestic deal)
- In March 2025, Sun Pharmaceutical Industries Limited announced the acquisition of Checkpoint Therapeutics, a Nasdaq-listed immunotherapy and targeted oncology company. The transaction strengthens Sun Pharma’s presence in innovative and specialty pharmaceuticals by adding UNLOXCYT, an FDA-approved treatment for advanced cutaneous squamous cell carcinoma.
- In February 2025, ONGC NTPC Green completed the 100% acquisition of Ayana Renewable Power for US$ 2,247 million (Rs. 18,700 crore), marking one of the largest renewable energy acquisitions in India. (Domestic deal)
- In May 2025, Sumitomo Mitsui Banking Corporation (SMBC) acquired a 20% stake in Yes Bank for US$ 1,590 million (Rs. 13,200 crore), reflecting continued foreign interest in India’s banking sector. (Inbound deal)
- In June 2025, JSW Paints acquired a 75% stake in Akzo Nobel India for US$ 1,098 million (Rs. 9,100 crore), expanding its footprint in the paints and building products market. (Domestic deal)
- During FY 2025–26 (up to January 27, 2026), Foreign Portfolio Investor (FPI) activity in India indicated a phase of portfolio optimisation and asset reallocation amid evolving global market conditions. While foreign investors moderated direct equity exposure, debt instruments continued to attract investments of over Rs. 2,100 crore (US$ 0.25 billion), supported by stable macroeconomic fundamentals and policy continuity. FPIs also channelled Rs. 17,025 crore (US$ 2.0 billion) into mutual fund schemes, reflecting a preference for diversified and professionally managed market exposure.
- In November 2025:
- November 2025 recorded US$5.6 billion in PE/VC investments, a 31% year-on-year increase (US$4.3 billion in November 2024) and a 4% month-on-month increase (US$5.4 billion in October 2025).
- The largest deal was Brookfield acquiring a 100% stake in Ecoworld, a 7.7 million sq. ft. Grade A office campus in Bengaluru, for US$ 1.5 billion.
- Real estate led deal activity in November 2025, with investments touching Rs. 30,300 crore (US$ 3.65 billion). The surge reflects renewed interest in commercial assets and income-generating real estate.
- Infrastructure continued to attract steady capital, supported by long-term project visibility and policy support. Deal values stood at Rs. 4,400 crore (US$ 0.53 billion) in November 2025.
- Financial services witnessed sustained investor interest driven by consolidation and balance-sheet expansion. The sector recorded deal values of Rs. 4,000 crore (US$ 0.48 billion) in November 2025.
- Technology deals remained selective but stable, aligned with digital transformation and innovation-led growth. Investments in the sector amounted to Rs. 2,480 crore (US$ 0.30 billion).
- Pharmaceuticals saw moderate deal activity, reflecting targeted investments in specialty manufacturing and healthcare capabilities. Deal value stood at Rs. 1,070 crore (US$ 0.13 billion).
- Food and agriculture attracted continued interest driven by processing, logistics and value-chain upgrades. The sector recorded deals worth Rs. 1,020 crore (US$ 0.12 billion).
- E-commerce activity remained focused on strategic and consolidation-led investments. Deal values reached Rs. 620 crore (US$ 0.08 billion) in November 2025.
- Top M&A Deals in 2024:
- India’s merger and acquisition (M&A) activity in 2024 was led by major domestic and inbound deals across key sectors such as energy, media, infrastructure, and healthcare.
- Gujarat Gas Ltd merged with Gujarat State Petronet Ltd and Gujarat State Petroleum Corporation Ltd in a domestic merger valued at Rs. 50,070 crore (US$ 5.65 billion).
- Reliance Industries Ltd and Viacom 18 Media Pvt Ltd (Media Undertaking) entered into a joint venture with Walt Disney Co’s Star India Pvt Ltd in a domestic deal worth Rs. 40,145 crore (US$ 4.53 billion).
- Cartica Acquisition Corp acquired Nidar Infrastructure Ltd in an inbound merger valued at Rs. 24,370 crore (US$ 2.75 billion).
- Aster DM Healthcare Ltd acquired Quality Care India Ltd from TPG Capital LP and Blackstone Inc in a domestic merger valued at Rs. 18,876 crore (US$ 2.13 billion).
- Data Infrastructure Trust acquired ATC Telecom Infrastructure Pvt Ltd from American Tower Corp in a domestic strategic investment worth Rs. 17,547 crore (US$ 1.98 billion).
- NHIT Eastern Projects Pvt Ltd acquired seven toll road projects from the National Highways Authority of India (NHAI) in a domestic asset acquisition valued at Rs. 16,749 crore (US$ 1.89 billion).
- Mankind Pharma Ltd acquired Bharat Serums & Vaccines Ltd from Advent International LP in a domestic strategic acquisition valued at Rs. 14,356 crore (US$ 1.62 billion).
- Jubilant Bhartia Group acquired Hindustan Coca-Cola Holdings Pvt Ltd from Coca-Cola Co in a domestic strategic acquisition valued at Rs. 13,116 crore (US$ 1.48 billion).
- In March 2024, Tata Motors announced of signing a Memorandum of Understanding (MoU) with Tamil Nadu government to set up Rs. 9,000 crore (US$ 1.08 billion) vehicle manufacturing facility in the state. This investment in expected to be invested over five years and will generate approximately 5,000 direct and indirect jobs.
- Union Minister of State (Independent Charge) Science & Technology; MoS PMO, Personnel, Public Grievances, Pensions, Atomic Energy and Space, Dr. Jitendra Singh, has stated that currently, Foreign Direct Investment (FDI) up to 100% is permitted in the domain of Satellites-Establishment and Operations, but exclusively through the Government route.
- The Adani Group has entered into four agreements to invest more than Rs 12,400 crore (US$ 1.49 billion) in partnership with the government of Telangana, India, spanning various sectors.
- The Adani Group has signed a Memorandum of Understanding (MoU) with the Government of Maharashtra to establish hyperscale data centre infrastructure, involving an investment of US$ 6.0 billion (Rs 50,000 crore).
Government Initiatives
The steps taken by the Government during the last few years to attract investments have borne fruit, as is evident from the record volume of FDI inflow that was received in the country in FY22. The government has launched policies that significantly simplify the ease of doing business, as evidenced by India's jump from rank 142 in 2015 to rank 63 in 2020 in the Doing Business Reports of the World Bank. Some of these policies are:
- The Government of India has introduced multiple measures to enhance ease of doing business for MSMEs, including a revised MSME classification effective April 1, 2025, aimed at enabling technology upgradation and business growth. Access to finance has been strengthened through schemes such as the Emergency Credit Line Guarantee Scheme (ECLGS) with an outlay of Rs. 5,00,000 crore (US$ 60.5 billion), which supported 14.6 lakh MSME accounts, and an additional Rs. 9,000 crore (US$ 1.1 billion) infusion into CGTMSE to enable Rs. 2,00,000 crore (US$ 24.2 billion) of collateral-free credit.
- India’s new rules for environmental, social, and governance investments and ratings are likely to attract more investors to the nation’s US$ 1.4 billion market and serve as a model for other countries. Over the last two years, India has implemented many measures to regulate its market for green and other assets, most notably permitting domestic fund managers to create plans under six types of ESG strategies.
- Securities and Exchange Board of India (SEBI) announced disclosure norms for foreign portfolio investors (FPIs) will come into effect from November 1st, 2023. Under these regulations, overseas funds that hold more than 50% of their equity investments in a single Indian corporate group or have more than Rs. 25,000 crore (US$ 3.01 billion) of equity assets under management (AUM) in the Indian market, will have to provide detailed information about their beneficial owners.
- The Reserve Bank of India has taken a number of actions to increase foreign exchange inflows. These actions consist of:
- Exempting additional Foreign Currency Non-Resident (Bank) [FCNR(B)] and Non-Resident (External) Rupee (NRE) deposits from Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR).
- Authorization for banks to accept new FCNR(B) and NRE deposits without regard to current interest rate regulations until the end of October 2022.
- Inclusion of all new issuances of 7-year and 14-year G-Secs under the Fully Accessible Route (FAR) for FPls.
- Exemption from the short-term limit for FPls' investments in G-Secs and corporate debt made until October 31, 2022.
- Permitting FPI in commercial paper and non-convertible debentures with an original maturity of up to one year.
- A temporary increase in the limit for external commercial borrowings (ECBs) under the automated route from US$ 750 million or its equivalent per fiscal year to US$ 1.5 billion.
- Increase in the all-in cost ceiling under the ECB framework by 100 basis points, subject to the borrower having an investment grade rating.
- Permission for AD Cat-I banks to use foreign currency borrowings made abroad to fund foreign currency loans to organizations for a variety of end uses other than exports.
- The introduction of the Goods and Services Tax, easing liquidity problems of NBFCs and Banks, the reduction of corporate tax, improvements to the business environment, changes to the FDI policy, reduction in Compliance Burden, policies to support domestic manufacturing through public procurement orders, and the Phased Manufacturing Program (PMP) are just a few of the actions taken by the government to encourage domestic investments.
- In the Budget 2023-24 session, it was informed that the Government has decided to continue the 50-year interest-free loan to state governments for one more year to spur investment in infrastructure and to incentivize them for complementary policy actions, with a significantly enhanced outlay of Rs. 1.3 lakh crore (US$ 16 billion).
- The National Logistics Policy (NLP) aims to decrease the cost of logistics and make it to par with that of other developed nations. A comprehensive approach to address cost inefficiencies is being laid down by establishing an interdisciplinary, cross-sectoral, multijurisdictional framework for enhancing the entire logistics ecosystem. This would bolster India's economy, provide employment opportunities, and make Indian products more competitive in the global market. It was launched on September 17, 2022.
- Foreign Exchange Management (Overseas Investment) Regulations, 2022 is an updated legal framework for foreign investment that offers simplification of the previous framework and has been adjusted to reflect the current dynamics of business and the economy. The "Ease of Doing Business" has been greatly improved with the addition of clarity about overseas direct investment and overseas portfolio investment, as well as the transition of numerous overseas investment-related transactions that are now under an automatic route that was previously under the approved route.
- The Government of India increased FDI in the defence sector by liberalizing it to 74% through the automatic route and 100% through the government route.
- The Foreign Investment Facilitation Portal (FIFP) is a new online single-point interface of the government for investors to facilitate Foreign Direct Investment proposals to evaluate and further authorize them under the Government approval route.
- The sectoral cap for the pharmaceutical industry has been lowered, 74% of FDI is permitted in the Brownfield Pharma sector via the automatic method, and 100% is permitted via the approved route.
- In the Civil Aviation Sector, 100% FDI is allowed under automatic route in Brownfield Airport projects.
- For Single Brand Retail Trading, local sourcing norms have been relaxed for up to 3 years and 100% FDI is allowed under automatic route.
- The Department for Promotion of Industry and Internal Trade (DPIIT) has introduced a dynamic reform exercise called the Business Reforms Action Plan, which ranks all the states and UTs in the country based on the implementation of designated reform parameters. The reforms have focused on streamlining the current rules and procedures and getting rid of unnecessary requirements and steps. The Action Plan covers multiple reform areas such as:
- Investment Enablers
- Online Single Window System
- Land administration and Transfer of Land and Property
- Construction Permits Enabler
- Labour Regulation Enablers
- Environment Registration Enablers
- Inspection Enablers
- Paying Taxes
- Obtaining Utility Permits
- The government has implemented an investor-friendly strategy to encourage FDI, and the majority of sectors are accessible to 100% FDI under the automatic route. In order to keep India a desirable and welcoming place for investors, the FDI policy is also revised frequently. Any changes to the policy are made after extensive consultations with stakeholders, including apex industry chambers, associations, representatives of industries/groups, and other organizations.
- The National Monetization Pipeline (NMP) was launched in 2021 to provide a comprehensive view to investors and developers of the available investment avenues in Infrastructure. Over a four-year period, the total indicative value of NMP for the Central Government's core assets has been assessed at Rs. 6 lakh crore (US$ 75.18 billion).
- The Union Cabinet set up Empowered Group of Secretaries (EGoS) and Project Development Cells (PDCs) in Ministries/Departments of the Government of India to expedite investments in conjunction with state governments, hence expanding India's pipeline of investable projects and attracting more FDI and domestic investments.
- The Ministry of Labour and Employment has taken several steps to streamline labour laws to make conducting business easier. By condensing, combining, and rationalizing the pertinent provisions of 29 Central Labour Laws, the Government has notified four labour codes: the Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020, and the Code on Occupational Safety, Health, and Working Conditions, 2020.
Road Ahead
India’s investment environment is set to strengthen further, driven by a stable reform agenda, expanding domestic demand, and rising confidence among global and domestic investors. In the years ahead, capital deployment is expected to concentrate on scaling manufacturing capacities, upgrading infrastructure networks, and advancing digital adoption across sectors. Flagship initiatives such as the Production-Linked Incentive framework, large infrastructure programmes, and the transition towards clean energy and electric mobility are likely to remain key enablers of investment inflows.
The next stage of development is expected to be marked by wider participation from small and medium enterprises, start-ups, and innovation-led sectors, including artificial intelligence, semiconductors, and climate-focused technologies. Greater formalisation and deeper financial inclusion are also improving market access and broadening the base of investible opportunities.
India’s structural strengths continue to support its attractiveness as an investment destination. A young workforce, rising disposable incomes, ongoing urban expansion, and a growing middle class are creating sustained demand across sectors.
At the same time, regulatory simplification, logistics modernisation, and sustainability-oriented policies are improving ease of doing business and operational efficiency.
Looking ahead, policy continuity, reform momentum, and increasing global interest in India’s digital and green transition are expected to sustain investment activity. With a maturing innovation ecosystem and deeper capital markets, India is well positioned to offer long-term opportunities across diverse industries and asset classes.
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