INDIA Trends and Developments Contributed by: Anuja Tiwari, Mallika Anand, Pranjal Bhattacharya and Antra Shourya, AZB & Partners
storage and e-mobility, nuclear energy, and infrastructure sectors (eg, airports, roads and ports). Antra is a member of the Bar Council of Delhi, India.
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The Key Factors Driving M&A Activity in India’s Energy and Infrastructure Sectors India has been experiencing dynamic trends in the energy and infrastructure M&A during the past decade − driven by a confluence of factors, including techno- logical advancements, evolving regulatory framework, climate change and transformative geopolitical land- scapes. The heightened urgency of the climate crisis has accelerated calls to action for the energy indus- try to shift from traditional fossil-fuel-based systems (eg, oil, natural gas, and coal) to renewable energy sources. In its commitment to achieve net zero by 2070, India is currently laying the foundations for a new energy and infrastructure system while inviting global partici- pation. This shift has led to increased inbound M&A activity in the energy and infrastructure sectors in India. Further, sectoral growth in the manufacturing and automotive sectors can be mainly attributed to India’s strategic initiatives to augment its domestic capabili- ties, including the “Make in India” campaign and the significant liberalisation of foreign direct investment (FDI) in these sectors by increasing the automatic route threshold. India has also pledged an investment
of USD5 billion in the clean energy value chain (includ- ing renewable energy, green hydrogen and electric vehicle markets) at the Indo-Pacific Economic Frame- work for Prosperity (IPEF) Clean Economy Investor Forum meeting. Against this backdrop, deal-making activity has considerably improved in 2024−25 as compared to 2022−23 and 2023−24, with M&A and FDI activity in the energy and infrastructure sectors occupying a significant percentage of the overall deal volume. According to data from the Indian government, the FDI inflow is estimated at USD81 billion in 2024−25 – marking a 14% increase from the previous year – with the major share of investments in the manufacturing sector, energy and its subsectors, and technology. These deals, however, are largely strategic and sub- sector-focused rather than target-based portfolio build-up. Some of the key driving factors that have led to sector-based M&A activity have been energy security, decarbonisation goals, and electrification, as well as the development of digital infrastructure and manufacturing capabilities.
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