INDIA Trends and Developments Contributed by: Sidharrth Shankar and Rishabh Gupta, JSA
Introduction India’s private equity (PE) market started 2025 on the heels of a transformative year. The previous chapter of this guide explored India’s resilience amid global headwinds, the continuity of its political leadership in an election year, and therefore how a favourable and stable policy climate fuelled a robust uptick in foreign direct investment (FDI) and PE deals. It exam - ined emerging themes across key sectors such as manufacturing, space, defence, IT, healthcare, and clean energy, highlighting India’s continuing appeal as a global investment destination. As a milestone, in 2024, cumulative gross FDI inflows into India crossed USD1 trillion since April 2000. 2025 Thus Far: Overview and Broad Themes The year 2025 has been marred by global uncertain - ties and significant disruptions, including long-sim - mering geopolitical tensions boiling over (both near and not-so-far), breakdown of US–India tariff nego - tiations resulting in up to 50% tariff imposition on a wide list of key Indian exports, and inflationary pres - sures, high interest rates and financial tightening in key developed markets. Notwithstanding these uncer - tainties, 2025 has largely sustained the momentum set last year, with India not only maintaining its position as one of the fastest-growing major economies but also retaining its leadership position in initial public offering (IPO) volumes (22% of all global IPO activity in Q1 2025) and attracting significant total FDI (USD17.5 billion in Q1 2025 versus USD19 billion in Q1 2024, despite a weakened rupee). India has navigated global trade pressures by progressing bilateral trade treaty discussions with key partners, initial steps towards a recalibration of its previously fraught economic relationship with China, and a landmark closure of a wide-spectrum India–UK free trade agreement (cover - ing over 95% of tariff lines). The current PE landscape is defined by several key trends and themes, a few of which will be explored further in this chapter. • Continuing evolution and maturation of the Indian PE and venture capital (VC) ecosystem – It is argued that the interplay between deepening domestic capital and recalibrated (but not dimin - ished) foreign participation has given rise to a more
resilient, multi-tiered funding architecture, which can support companies across varied stages, risk profiles and economic cycles. • Sectoral focus and sector highlights – In 2025, GPs are doubling down on sectoral depth and thesis- driven strategies that enable them to differentiate not just on capital, but on insight, domain fluency and value creation potential, while leveraging expe - rience of existing teams and operating partners. • Deal sophistication, creative structuring and exit strategies – PE in India has evolved beyond mere capital deployment to focus on strategic control, bespoke structuring and disciplined exit planning. Funds are reshaping investment models to gain deeper influence, align stakeholders and institu - tionalise value creation. This marks a clear shift towards maturity, not just in deal making, but in how outcomes are engineered across the invest - ment life cycle. Marking the Evolution of the Indian PE and VC Ecosystem Historically, possibly other than at the very early or pre-seed stages, the Indian private risk-capital eco - system has been reliant on foreign capital as the change-maker. For example, the likes of Sequioa and YC at the growth stage; Warburg, Accel, Temasek, Tiger, General Atlantic, TPG Growth and others at the mid-stage; and sponsors such as Carlyle, EQT(BPEA), Bain, and Blackstone at the late-stage, have gener - ally led rounds and price-discovery, and played sheet anchor roles in cap-table support and making key life cycle decisions. Ultimately, even exits through IPOs have relied on sophisticated US investors or “quali - fied institutional buyers” for price setting and anchor positions in book building. That paradigm, however, has shifted meaningfully. In 2025, examples abound of IPO-ready or mid-stage start-ups which have not raised much (if any) foreign capital (at least directly, ie, barring overseas limited partners (LPs) of domestic GPs). Indian-born or India- first growth and VC funds, such as Sauce.VC, Kalaari, Chiratae, IvyCap and InfoEdge, are more than likely to be the source of the first and even second cheques for budding founders. The immense popularity of the Indian version of “Shark Tank” and eye-popping view - ership numbers for founder-run podcasts and vlogs,
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