Amidst a landscape of persistent global economic volatility and geopolitical shifts in 2025, India has distinguished itself as a beacon of growth and stability, significantly recalibrating the international investment calculus. This resilience has translated directly into a robust surge in merger and acquisition (M&A) activity, particularly in cross-border transactions, a trend firmly anticipated to intensify throughout 2026. While initial public offerings (IPOs) have captured considerable attention and capital, the strategic imperative of M&A for both domestic and international entities is increasingly paramount, driven by India’s compelling economic fundamentals, expanding market opportunities, and a progressively supportive regulatory framework.
The statistics from 2025 vividly illustrate this burgeoning trend. Inbound cross-border deals reached an impressive $28.9 billion across 99 transactions, a near doubling of value compared to the $15.1 billion from 175 deals recorded in 2024. Simultaneously, outbound M&A saw an even more dramatic increase, escalating to $16 billion across 135 transactions, up from $7.3 billion across 126 deals in the previous year. This substantial uptick in deal value, often accompanied by a lower volume of transactions, underscores a clear shift towards larger, more strategic, and impactful deals. Domestically, while transaction volumes saw a slight dip from 516 deals ($39.3 billion) in 2024 to 439 deals ($28.1 billion) in 2025, the overall M&A ecosystem remains vibrant, indicating a strategic re-prioritization towards high-value, transformative acquisitions.
Several high-profile transactions in 2025 epitomize this heightened cross-border ambition. Noteworthy inbound deals included MUFG’s substantial $4.4 billion stake acquisition in Shriram Finance, Emirates NBD’s $3 billion majority stake in RBL Bank, Schneider Electric’s $6.4 billion deal with Lauritz Knudsen Electrical & Automation, and Capgemini’s $3.3 billion acquisition of WNS Global Services. On the outbound front, Tata Motors’ $4.5 billion acquisition of Iveco and Coforge’s $2.35 billion deal for US-based engineering services firm Encora signal Indian corporations’ growing confidence and capacity to acquire significant international assets, leveraging robust balance sheets and strong market backing for their currency. These transactions are not merely financial events but strategic moves designed to expand market reach, acquire critical technologies, and diversify revenue streams in a globally integrated economy.
Industry leaders concur on the fundamental drivers of this M&A acceleration. Nitin Maheshwari, co-head of India Investment Banking at JP Morgan, highlights that Indian companies now view M&A as a critical lever for accelerating growth and solidifying market positions. This proactive approach is underpinned by India’s consistent profitable growth, a burgeoning domestic consumption market, expanding export capabilities, an aggressive digital transformation agenda, and sustained government investment in infrastructure and energy transition initiatives. These macroeconomic tailwinds provide a fertile ground for strategic consolidation and expansion, encouraging both domestic and international players to engage in larger, bolder transactions, albeit with a continued emphasis on strategic fit, cultural alignment, and price discipline.
India’s ascendance on the global investment stage is further validated by its growing prominence in emerging market indices. A recent Morgan Stanley report underscored India as one of the most compelling opportunities for international growth investors. The country’s share in the MSCI Emerging Index has more than doubled from 8% to 16% over the past five years, a period during which China’s weighting declined significantly from 43% to 29%. Furthermore, India surpassed China in 2024 to become Asia’s largest private exits market, accounting for an impressive 33% of all value, demonstrating not just the ability to attract capital but also to provide lucrative exit opportunities for investors. This shift reflects a broader global re-evaluation of emerging market portfolios, with India increasingly seen as a de-risked and high-growth alternative.
Government policies have played a pivotal role in cultivating this M&A-friendly environment. Rahul Saraf, head of investment banking at Citi India, notes the government and regulators’ proactive stance on growth, including the relaxation of Foreign Direct Investment (FDI) limits across various strategic sectors such as insurance, banking, and defense. Concurrently, efforts to enhance the ease of doing business and liberalize funding avenues, such as External Commercial Borrowing (ECB) norms and bank M&A financing, have significantly de-risked and streamlined cross-border activity. These policy reforms signal a clear intent to integrate India further into the global capital markets and facilitate large-scale strategic investments.
The private equity (PE) landscape in India is also a significant catalyst. Global PE giants such as Blackstone, EQT, TPG, Advent, Bain, Carlyle, Warburg Pincus, and CVC, alongside prominent domestic backers like ChrysCapital, Kedaara, and Multiples Private Equity, have collectively raised record levels of "dry powder." This capital is actively seeking deployment in high-growth markets, and India presents an irresistible proposition. Klaas Oskam, managing director and chief executive at DC Advisory, points out the increasing prevalence of buyout transactions in India, moving beyond traditional minority stakes. This strategic shift, coupled with the belief that larger deals yield greater integration efficiencies and scale, is driving up average transaction sizes and is expected to continue.
Geographically, the investor base in India is diversifying. Beyond traditional Western investors, there has been a notable surge in interest from Japanese strategics and investors from the Gulf Cooperation Council (GCC) countries. Japanese firms are increasingly active in the Financial Institutions Group (FIG) and technology sectors, driven by their own demographic challenges and the search for growth markets. Meanwhile, Middle Eastern strategics are deploying significant sovereign wealth capital into India’s infrastructure, banking, and renewable energy sectors, aligning with their broader economic diversification strategies. This expanding pool of international capital underscores India’s universal appeal as a robust investment destination.
Despite the robust M&A environment, the buoyant Indian IPO market presents a dynamic interplay. 2025 saw India reach record levels in terms of both IPO filings and capital raised, totaling approximately $21 billion. This surge was fueled by a mix of new-age technology listings like Meesho, Pine Labs, Groww, Physicswallah, and Wakefit, alongside established giants such as LG Electronics India, Tata Capital, and HDB Financial Services. JP Morgan executives anticipate that $20 billion will become the new baseline for annual IPO proceeds, driven by strong domestic investor participation and an expected return of foreign inflows. This robust public market momentum creates a powerful synergy with M&A. As Citi’s Saraf explains, M&A and IPOs are cyclical and complementary; a strong public market provides attractive exit avenues for investors and a valuable currency for acquiring companies.
Furthermore, the strong valuations in public markets encourage more companies, including multinational corporations, to list their local subsidiaries, as seen with LG Electronics and Hyundai Motor. This not only unlocks value but also creates a new class of public companies with strong balance sheets and access to capital, poised to become active acquirers themselves. Many firms that have recently gone public will look to strategic M&A to justify their valuations and fill portfolio gaps, both domestically and in overseas markets. This creates a self-reinforcing cycle where a thriving public market feeds into M&A activity, driving further consolidation and growth.
Looking ahead to 2026 and beyond, the M&A landscape in India is set for continued dynamism. Key sectors like financial institutions, manufacturing (including automotive), technology, healthcare, and infrastructure/renewables are expected to lead the charge. Financial services will see consolidation and digital transformation plays; manufacturing will benefit from supply chain diversification and government incentives like the Production-Linked Incentive (PLI) schemes; technology will continue to be driven by digital adoption and AI integration; healthcare by increasing demand and innovation; and infrastructure/renewables by massive public and private investment in sustainable energy. While global economic uncertainties, geopolitical tensions, and potential interest rate fluctuations could pose headwinds, India’s underlying structural growth drivers—its demographic dividend, robust domestic consumption, technological prowess, and proactive policy environment—position it strongly to sustain this M&A momentum, cementing its role as a global powerhouse for strategic dealmaking.
