India’s alternative investment industry is projected to witness substantial expansion, with total assets under management (AUM) estimated to reach $276 billion by 2030, up from $152 billion in December 2025, as per a recent report. The report emphasizes that this growth trend is expected to persist, fueled by increasing domestic wealth, enhanced financial literacy, and a favorable regulatory landscape.
The report highlights India’s trajectory to become the world’s third-largest economy by 2028, positioning it as an appealing hub for both local and global investors. Over the period from 2025 to 2030, the alternatives sector is forecasted to grow at a compound annual growth rate (CAGR) ranging between 11 to 14 percent, surpassing more developed markets.
A significant driver of this expansion is the escalating count of high-net-worth individuals (HNIs) in India. The affluent population in the country is anticipated to more than double from 2022 to 2027, leading to a surge in demand for sophisticated investment vehicles like Alternative Investment Funds (AIFs).
Investors are increasingly seeking diversified and higher-yielding alternatives beyond conventional investment avenues such as mutual funds and fixed deposits. Notably, domestic investors are playing an increasingly pivotal role in the alternatives landscape, accounting for over 66 percent of total investments as of December 2025, while foreign investors, though decreasing in share, are boosting their investments in absolute terms.
The report also underscores a growing inclination towards private credit within the realm of alternative investments. The preference for private credit is attributed to its relatively stable returns, predictable cash flows, and reduced susceptibility to market fluctuations. Simultaneously, the demand for flexible financing from mid-sized enterprises and stricter bank lending standards have opened up more opportunities in this segment.
Backed by regulatory backing from market regulator SEBI and favorable governmental policies, the alternative investment sector in India is evolving into a more transparent and structured domain. Consequently, industry participants are well poised to capitalize on the forthcoming growth phase, solidifying alternatives as an increasingly integral component of India’s financial landscape.
