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Private Equity Investment In India Slows In 2025, Long-Term Outlook Strong: KPMG Report

Well, PE investment in India has definitely slowed down this year, mainly due to global worries like US tariff policies. Despite the current dip, experts at KPMG say the long-term view for India is still incredibly strong because of its huge population and growing economy. They point out that global PE firms are now acting more like hands-on business builders there, not just financial investors. So, while 2025 might be a quieter year, the overall story for private equity in India

Key Points: PE Investment In India Softens In 2025, But Fundamentals Remain Attractive: KPMG

  • KPMG reports a sharp decline in India's PE investment value and deal volume in 2025
  • Geopolitical concerns and US tariff policies are cited as key reasons for the current slowdown
  • The report underscores India's strong long-term fundamentals, including demographics and consumption, as key investor draws
  • Global PE firms are shifting from financial bets to operational, business-building roles in India
  • The technology and healthcare sectors continue to attract significant PE interest in India
  • Global PE investment overall remained resilient in Q3 2025 despite regional softness
3 min read

Private Equity investment in India slows in 2025, but long-term outlook remains strong: KPMG

KPMG report notes a slowdown in India's PE investments in 2025 due to global headwinds, but highlights strong long-term fundamentals and a shift towards operational, business-building strategies.

"Despite experiencing some softness in its PE market at present, India continues to be viewed as a very attractive jurisdiction for PE investment given strong macro factors combined with its sizeable population, attractive demographics, and growing domestic consumption. - KPMG Report"
"India has incredibly strong macros, a growing population, the largest working age population in the world, and some of the highest savings rates in the world. All of this makes India a very attractive domestic consumer story. - Nitish Poddar, Head of Private Equity, KPMG in India"

New Delhi, December 22

The Private Equity (PE) investment in India has been relatively soft in 2025 primarily been driven by concerns about US tariff policies and other geopolitical issue, said a KPMG report on Monday.

In a report titled Pulse of private equity Q3'25 KPMG, a quarterly analysis of global private equity activity, KPMG said as of the end of Q3 of 2025, PE investment in India was just $14.9 billion across 217 deals, compared to $26.3 billion across 289 deals during all of 2024.

Should current trends continue, 2025 could be the slowest year for PE investment since 2019 and the slowest for deal volume since 2020, it said.

"Despite experiencing some softness in its PE market at present, India continues to be viewed as a very attractive jurisdiction for PE investment given strong macro factors combined with its sizeable population, attractive demographics, and growing domestic consumption," KPMG said in its report.

PE investment showed a much more optimistic trajectory for PE investment in India between 2020 and 2024. During that five-year period, the KPMG report said, India attracted over USD 20 billion in PE deal value each year. Deal volume was also very robust, reaching a record high of 289 deals in 2024.

KPMG highlighted that global private equity firms are increasingly acting as business builders in India, often acquiring majority stakes and investing operationally to scale companies rather than pursuing minority or purely financial investments. Many international funds have expanded their on-ground presence in India to strengthen local relationships and support portfolio companies.

"India has incredibly strong macros, a growing population, the largest working age population in the world, and some of the highest savings rates in the world. All of this makes India a very attractive domestic consumer story. That's a big draw for PE investors along with the significant amount of opportunity there is for PE players to come in, invest money, and make money by building up India-based businesses," said Nitish Poddar Head of Private Equity KPMG in India.

At an operational level, KPMG report said the PE firms are taking a number of different approaches towards building businesses in India.

Some PE firms are identifying businesses within niche sectors and using those as a platform for bringing in complementary businesses in order to build larger, more diversified companies. Others are acquiring similar small businesses and rolling them up into a stronger whole better able to drive value and profitability, the report said.

Some PE firms are also targeting their investments towards businesses able to support or provide services to other companies within their global portfolio in order to drive value across their ecosystem of investments, it mentioned.

The technology sector is one of the biggest areas of PE investment in India. PE investors have also shown significant interest in the healthcare and life sciences space in India, the report said.

Global PE investment remained resilient in the third quarter of 2025, reaching USD 537 billion across 4,062 announced deals, KPMG said in its report.

- ANI

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Reader Comments

P
Priya S
It's concerning to see the numbers drop so sharply from last year. While the report is optimistic, I hope this doesn't affect job creation in the tech and healthcare sectors, which have been major employment drivers. 🤞 The focus on building businesses, not just financial plays, is a good sign though.
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Nikhil C
The report makes sense. Global funds are being cautious because of US policies. But honestly, this might be a good time for Indian promoters and family offices to step up and invest in our own growth story. Why wait for foreign money when the opportunity is here?
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Sarah B
Working in the startup ecosystem, I've felt this slowdown. Funding rounds are taking longer and valuations are more realistic. In a way, it's healthy. It separates serious businesses from the hype. The focus on operational building is what India needs for sustainable growth.
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Rohit P
KPMG's long-term outlook is positive, and I agree. But we must also acknowledge that the regulatory environment needs to be more predictable to attract consistent PE flows. Sometimes policy changes create uncertainty. A stable policy framework is as important as strong macros.
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Meera T
The shift from minority stakes to majority ownership and business building is fascinating. It shows global investors are here for the long haul, ready to roll up their sleeves. This creates more value than just financial engineering. Good for the ecosystem! 🇮🇳

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