How selective investing shaped India’s M&A deals in 2025

India’s M&A trends in 2025 told a quiet but interesting story. The total deal value rose to US$123.8 billion in 2025, up 18% from US$106.3 billion in 2024, even as volumes declined by 3%. Though the year saw rising geo-political uncertainty, trade friction and shifting supply chains, the message was simple: investors were not stepping away from India; they were becoming more selective. Instead of pursuing multiple smaller opportunities, they focused on deals that offered long-term relevance at valuations that made sense amidst heightened business risk premium.

Infrastructure leads in value

The infrastructure sector is the largest contributor to deal value in 2025 with a total transaction value of US$24.6 billion, up 35% from US$18.2 billion in 2024, even as deal volumes declined by 18%. Though the maximum deal value expansion was seen in the industrials and auto sector, with a 105% increase in deal value alongside a 4% rise in volumes in 2025, the infrastructure sector took the lead in value. Large inbound deals backed by sustained government capex have improved asset viability and cash flow yield certainty. Moreover, green infrastructure has captured the interest of investors, with investments in green hydrogen and digital infrastructure, falling battery storage costs are making these projects easier and cheaper to run than before.

Sector analysis Infrastructure

M&A and PE deal trends (value) (US$ million)

Foreign investor confidence stays strong

In 2025, the number of cross-border deals declined by 20%, but their combined value jumped sharply to US$33.2 billion, a 155% rise from 2024. Inbound deals surged, signaling continued confidence among foreign investors. Strategic capital from the Middle East and Japan played a meaningful role, with India emerging as a preferred market for large multinational financial institutions. Global companies showed renewed interest in Indian assets across infrastructure, technology and industrials as they reworked global value chains.

Outbound cross border deals also increased from US$5.1 billion in 2024 (which was about 39% of the year’s total cross-border deal value) to US$13.7 billion in 2025, showing that Indian companies continued to pursue overseas assets. Activity was highest in the middle of the year, with July 2025 recording nearly US$6 billion of outbound deal value, followed by another strong rise in December 2025. These peaks showed a shift toward fewer but larger overseas deals.

Cross-border deal trends (value) (US$ billion)

Private equity stays measured

Private equity activity remained steady in 2025. Private equity investments India rose to US$60.7 billion, up 8% from US$56.2 billion in 2024, while volumes increased 9% to 1,475 deals in 2025. reflecting an increase in both PE investments and the volume of deals. Buyouts, growth investments and platform‑led partnerships drove activity, as investors focused on businesses with strong cash flows and clear paths to build sustainable business’s. Private equity exits volume declined to 257 from 285 in 2024, while exit value increased to US$32.9 billion from US$28.2 billion. 

PE deal split (value) (US$ billion)

Policy support strengthens India deal activity

The Union Budgets have consistently emphasized investment led growth, with government capital expenditure rising to INR11.21 lakh crore in FY26, equal to about 3.1% of GDP. Higher allocations towards infrastructure, manufacturing, biopharma and semiconductors improved long term visibility and supported large, value driven transactions. Further, the India–EFTA partnership, effective from October 2025, included a long term commitment of US$100 billion in investments, while the India–UK trade agreement and a new US-India interim trade framework improved clarified rules for investors and holds promise of more positive developments. 

Against the backdrop of geopolitical volatility, the middle east conflict and its impact on energy prices, downstream inflation and global supply chains, dealmakers will be even more selective in 2026. They are likely to favor scalable platforms that can win market share and protect margins in these volatile times.