INDIA Trends and Developments Contributed by: Kunal Chandra, Kabeer Mathur, Chinmay Bilgi, Sharnam Vaswani and Rajdeep Mukherjee, Trilegal
exercises and driving the need for stronger con - tractual protections. Geopolitics, Trade Policy and the Changing Deal Architecture Global trade developments during 2025 have influ - enced valuations and transaction structuring in India. Increased tariff barriers on certain Indian exports have created uncertainty for export-oriented sec - tors such as electronics, leather, textiles, engineering goods, and gems and jewellery. As a result, pricing models and deal documentation are now increasingly accounting for potential volatility, with transactions incorporating contingent consideration, earn-outs and deferred payments to address valuation gaps arising from trade-related risks. Typically, material adverse effect (MAE) clauses exclude changes in general economic, financial or political conditions, which would preclude renegotia - tion triggered by tariff volatility. For sectors especially exposed to trade barriers, including manufacturing with multi-jurisdictional supply chains, parties ben - efit from MAE clauses permitting renegotiation on account of rapidly evolving trade policy. In a similar vein, it is important to evaluate the exclusion of acts of war from MAE clauses given the precarious situa - tion in West Asia and its impact on trade flows and supply chains globally. Buyers may wish to consider securing the right to walk away from transactions that become unviable, whether commercially or as a result of sanctions on the target countries. At the same time, multinational corporations are con - tinuing to pursue a China Plus One diversification agenda, with India emerging as an important manu - facturing and sourcing location. Also, trade agree - ments with the European Free Trade Association and the United Kingdom are expected to improve mar - ket access and support cross-border investment in sectors such as pharmaceuticals, financial services and manufacturing, reinforcing India’s position as an attractive destination for global strategic and financial capital. A Market Moving From Participation to Ownership For several years, investments in the Indian market have been driven by a familiar premise – participa -
tion in India’s economic growth. Deal trends in 2025 saw this thesis evolve – in addition to participation in macroeconomic growth, investors are increasingly preferring transactions where they can influence oper - ations, capital deployment and strategic direction. The average inbound M&A deal size increased significantly from approximately USD44 million in 2024 to nearly USD242 million in 2025, indicating a clear movement towards larger control-oriented investments rather than minority stakes. The result is a market moving from passive participation to active ownership, char - acterised by larger investments, more concentrated positions, and growing operational involvement and capabilities. Expanding Exit Options and the Emergence of a Full-Cycle Market The exit question has historically been one of the fore - most considerations in Indian dealmaking, with limited viable exit routes representing a key structural con - straint of the M&A market. Exit options continued to evolve significantly through 2025, with strategic sales to industry participants becoming more frequent as consolidation accelerated across several sectors. At the same time, India’s IPO market has come into its own. Listing volumes have grown exponentially, domestic retail and institutional participation has deepened, and strong post-listing performance has enabled private equity sponsors and early-stage inves - tors to achieve meaningful partial or full exits through IPOs and subsequent block trades. The combination of a robust strategic sales market and an increasingly liquid public market has, among other things, made investors more willing to make larger, more concen - trated investments. This dynamic has also prompted a wave of “reverse flips”, with companies choosing to redomicile their holding structures to India to access domestic capital markets and position themselves for local listings. Domestic Consolidation and the Search for Scale Domestic M&A activity reached record levels in 2025 – 713 transactions were completed during the year, with a strong trend towards efficiency-seeking strate - gic consolidation as opposed to market entry. Domes - tic transactions constituted roughly 74% of the total volume of deals and continued to drive deal activity.
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