Why India’s deal market in Q3 2025 signals long-term M&A resilience

Deals in India in 2025 are unfolding against a backdrop of shifting global trade dynamics and domestic policy realignment. The imposition of US tariffs on Indian exports in 2025 and ongoing negotiations for free trade agreements with European Free Trade Association (EFTA), the UK, and the Gulf Cooperation Council (GCC) are more than diplomatic developments; they are strategic inflection points reshaping investor sentiment and transaction priorities.

As India doubles down on manufacturing and digitalization, these macro shifts are reframing how capital flows into the country and how India Inc. allocates risk capital for outbound acquisitions. The result is a market that continues to adapt, absorb and advance, even as uncertainty defines the global environment.

Momentum has come back to India’s deal-making landscape

The third quarter of 2025 underscored India’s transactional strength. According to the latest EY India M&A Report Q3 2025, total deal value surged to US$26 billion—up 19% sequentially and 37% as compared to Q3 2024—signaling renewed confidence even amid global uncertainty. Alongside this rise in value, deal volume remained robust.

In Q3 2025, a total of 280 M&A deals were recorded, with 203 being domestic transactions. Outbound deals numbered 41, while 36 were inbound deals. This distribution highlights a strong domestic consolidation trend accompanied by active cross-border deals in both directions, underscoring a balanced and resilient deal-making environment. Indian corporates continue to adopt a strategic view, acquiring assets in overseas markets that help them diversify and also fortify their share in key markets in an attempt to balance the volatility in trade flows.

A landmark inbound deal to take place at the beginning of Q4 2025 was Emirates NBD’s announced acquisition of a controlling stake in RBL Bank through a primary infusion of approximately US$3 billion (INR26,850 crore). As the largest acquisition in Indian banking and the biggest foreign investment in the country’s financial services sector, this deal underscores strong global confidence in India and reaffirms the attractiveness of its banking and financial services industry. Private equity activity also stayed healthy this quarter, with 369 investment deals and 81 exits. The largest PE transaction was recorded in September, when International Holding Company invested US$1 billion for a 43% stake in Samman Capital, marking a significant deal in the NBFC sector and underscoring continued investor interest in the Indian financial services sector.

July 2025 stood out with US$11.8 billion worth of deals driven by a rise in mid-sized transactions that offset the moderation in mega-deals. The quarter saw 53 significant deals valued at US$100 million or more, but only two exceeded the billion-dollar mark.

Sectoral confidence and shifting priorities

The automotive sector took the lead in value terms, powered by Tata Motors’ US$4.45 billion outbound acquisition of Iveco, highlighting India Inc.’s growing global ambitions. The consumer products and retail sector followed with US$3.3 billion in transactions, while the life sciences sector recorded US$2.5 billion across 46 deals, underscoring steady investor confidence in India’s healthcare and pharmaceuticals sectors.

Technology continued to dominate deal volume with 119 transactions—up from 98 in Q3 2024 and 78 in Q2 FY25—highlighting the continued rise of Indian technology and digital deals. Meanwhile, life sciences and consumer sectors demonstrated consistent investor interest through both strategic and PE inflows.

Policy tailwinds and the next growth curve

Policy reforms remain central to sustaining investor optimism. The government’s calibrated approach to liberalizing foreign investment is deepening capital participation and aligning with broader M&A and private equity trends in 2025.

In healthcare, the shift in the state’s role from provider to payer is spurring insurance penetration and expanding organized healthcare capacity. This is reshaping the sector from within, creating scalable opportunities for both domestic and global investors.

The recent US tariffs of up to 50% on Indian exports have heightened pressure on MSMEs, textiles and engineering goods, creating uncertainty for export-linked businesses. However, India is in active discussions with US to expand market access and also diversifying and strengthening its trade ties with the European Free Trade Association (EFTA) agreement taking effect and ongoing discussions with the UK, the Gulf Cooperation Council (GCC).

Strategic adaptation and emerging advantages

India’s M&A deal market is marked by a notable engagement in cross-border transactions, underscoring the country’s evolving role in the international economy. With strong GDP growth and controlled inflation, India continues to present a well-positioned economy that fosters a supportive environment for sustained deal activity.

India is solidifying its status as one of the world’s most dynamic transaction economies, adapting strategically and leveraging emerging advantages.