Private Equity investment in India relatively slows in 2025 amid global uncertainty: KPMG
New Delhi [India]: According to KPMG’s Private Equity Pulse Q3 report, private equity investment activity in India slows down in 2025; This reflects broader global uncertainty linked to geopolitical developments and changing trade policies.
As of the end of the third quarter of 2025, private equity investments in India amounted to US$ 14.9 billion in 217 deals, compared to US$ 26.3 billion recorded in 289 deals in the whole of 2024. KPMG stated that if the pace of activity observed in the 3rd quarter continues, 2025 could be the weakest year for private equity investments in India since 2019.
“If current trends continue, 2025 could be the slowest year for PE investment since 2019 and the slowest year for transaction volume since 2020,” the report said. The statement was included.
The report largely attributed the slowdown to uncertainty around U.S. tariff policies and geopolitical tensions; This has increased the difficulty in estimating risks and returns.
Despite the slowdown in investment activity, the report stated that private equity investors’ interest in India continues.
During 2020-2024, India consistently attracted more than $20 billion in annual PE investment, with deal volumes peaking in 2024.
KPMG highlighted India’s macroeconomic fundamentals, demographic profile, domestic consumption growth and capital market performance as factors supporting continued investor engagement.
The KPMG report observed that many global private equity firms operating in India are increasingly adopting a “start-up” approach.
This includes establishing local offices and teams, pursuing majority or controlling shares, and actively participating in operational and strategic decision-making processes in portfolio companies.
“Global PE investors have put a lot of effort into building their market presence in India. Many have realized the importance of having a local team in a local office with the ability to build local relationships and have set up shop directly in the country to invest and provide active support to their portfolio companies. To date, PE investment in India has largely been a controlled deal market, with PE investors preferring to acquire majority stakes in businesses to better unlock value and accelerate business growth. Many PE investors see their role as business developers. The report said “Rather than just financial investors in India,” it states.
KPMG also noted that the maturation of India’s private equity ecosystem is also reflected in the increasing size of India-focused funds.
Fundraisings exceeding US$1 billion, which were relatively rare in previous years, are becoming more frequent, indicating deeper institutional participation in the market.
From a sectoral perspective, the report identified technology, healthcare, life sciences and financial services as areas of continued private equity interest.
In technology, the focus of investors has evolved from traditional IT services to software-as-a-service models.
Interest has also spread to manufacturing segments, including AI-assisted manufacturing.
Activity in financial services covers banking, non-banking finance, insurance, asset management and fintech. Looking forward, KPMG noted that the current slowdown in private equity investment activity is expected to continue until greater clarity emerges on global trade and tariff policies.
The report also noted that increased competition for high-quality assets could impact valuations as market conditions stabilize.
This article was generated from an automated news agency feed without modifications to the text.
