India is gaining prominence as a top choice in Asia-Pacific private markets, offering global investors both scale and resilience amid a slowdown in the region, as per a report by McKinsey & Company. Over 31% of surveyed limited partners ranked India as their top choice, with 76% placing it in their top three picks. This shift in capital flows indicates a reevaluation by investors of Asia, looking beyond China for sustained growth.
Investors are showing a growing interest in India-focused funds, with more than half planning to increase their allocations. Currently, private markets make up 64% of limited partner allocations to India, with buyout and growth strategies expected to attract the most attention in the next five years. These strategies are favored for the control they offer.
From 2021 to 2025, the value of private equity and venture capital deals in India has surged to $207 billion, a 1.5 times increase from the previous five-year period. Exits have more than doubled to around $120 billion during the same timeframe. Notably, technology, IT, financial services, pharmaceuticals, healthcare, and consumer sectors accounted for nearly three-quarters of private capital investments in India.
The report highlights a significant increase of around 21% in private equity and venture capital deployment in India from 2020 to 2024, compared to the 2015-2019 period. Investors are increasingly turning towards private markets, seeking deeper partnerships and strategic opportunities. Kunal Sood, a partner at Pantheon, a private equity firm, noted that India’s appeal to investors stems from its structural growth narrative, driven by entrepreneurial talent, robust economic momentum, and growing domestic consumption.
