The year 2025 was remarkable in terms of deal making in India. It demonstrated the strength and resilience underlying Indian businesses and a nimble business environment.
Cross-border and domestic deal flow remained robust through the year.
The same trend is expected to continue in the coming years as well, notwithstanding temporary headwinds in global economic conditions.
Reports indicate that as of late 2025, PE/VC deal values saw a year-on-year increase of 31% over 2024 and, similarly, deal count saw a 12% increase over 2024. Capital market activity, too, remained at peaks in 2025.
As we look forward in the short to medium term, sectors such as consumer/retail, power/renewable energy, healthcare/wellness, manufacturing, BFSI and tech (including AI and SaaS-based plays) will continue to draw deal interest.
These trends are no less an outcome of a regulatory crucible in India that has aided as well as refined sharp deal making.
The most notable and recent example is the proposed liberalisation and clarity provided by the Indian government regarding Press Note 3 of 2020.
Beneficial ownership is to be tested at investor entity level, while it confirms that investors with non-controlling land bordering country beneficial ownership of up to 10% shall be permitted under the automatic route of India’s foreign direct investment regime, as per the applicable sectoral caps, entry routes, and attendant conditions.
There are also key industries where expedited clearance of investments from land bordering countries shall take place.
At present, these include investment in manufacturing in capital goods, electronic capital goods, electronic components, polysilicon and ingot-wafer, which are to be processed within 60 days.
These changes are expected to boost domestic as well as international sentiment and certainty for deal making in India.
In February, the external commercial borrowing regulatory regime was liberalised, with a wider pool of eligible borrowers as well as recognised lenders.
There are various other welcome changes in end-use restrictions, currency flexibility, all-in cost ceiling, and a standardised minimum average maturity period.
One key benefit of the changes extends to acquisition financing, with external debt becoming available for certain categories of control as well as distress acquisitions.
With the regime of mandatory dematerialisation of shares starting to settle in, potential bottlenecks in primary and secondary transactions by relevant Indian companies have largely abated.
The ambit of fast-track mergers has been widened, which should speed up any intra-group restructuring prior to or as part of a third-party acquisition.
Material changes in respective regimes have been prescribed via the introduction of the Indian Labour Codes and the Digital Data Privacy Act, 2023.
As a result, due diligence for deals need to pay closer attention to how labour benefits and compliances are handled in a target company.
Similarly, due diligence and deal discussions need to ensure that stakeholders in a prospective deal handle personal data in a suitable manner.
Overall, as the Indian deal making playbook continues to globalise, the deal making rulebook continues to evolve to ensure that transactions can be evaluated by domestic and international players with certainty and predictability.