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India’s high-growth market is attracting international investment and attention. With the government targeting over one hundred billion US dollars in annual foreign direct investment, India is positioning itself as a destination for investors from Europe, Asia and the US.
There are significant opportunities in both inbound and outbound legal work. It’s not just multinational companies coming in. Many Indian conglomerates are looking at outbound opportunities, too.
— Mini Menon vandePol, Global India Practice Chair
M&A & FDI activity has room to soar
Indian deal-making has peaked at a three-year high in value in 2025. In Q1 2035, India recorded 669 M&A transactions totaling USD 29 billion, the highest quarterly volume since Q1 2022 and the largest value since Q3 2022.1
India's expanding market opportunities, cost efficiencies, and competitive advantages have captured the interest of global investors. The government's ongoing efforts to improve the ease of doing business and implement progressive economic reforms further accelerate this trend, solidifying India as a destination of choice for M&A activity and foreign investment.
— Mini Menon vandePol, Global India Practice Chair
Recent legislation requires specific attention:
- Deal Value Threshold introduces an additional regulatory hurdle for investments that might otherwise have escaped merger review in India due to low asset values and revenues.
- New Combination Regulations set an industry-specific SBO in India for businesses in the digital sector.
- Substantial Business Operations (SBO) criteria considerations, which include specific conditions pertaining to Gross Merchandise Value (GMV), turnover and transactional value.
Read more in our Spotlight on India series
Regulatory complexities may extend deal timelines and increase compliance costs. Businesses should adopt a pragmatic approach to deal timing and meticulously design deal terms that will enable the company to function effectively over an extended period. This strategy will provide assurance to sellers and maintain the integrity of the business for buyers.
— Alan Zoccolillo, Partner, New York
Relaxation of FDI limits
The general trend has been one of continued FDI policy relaxation. Alongside changes to FDI thresholds across a number of key sectors including insurance, defense, telecoms and oil and gas, the Start-up India Initiative has also worked to boost foreign venture and early-stage growth capital into India’s booming start-up community.
Private equity investment is playing a pivotal role in India's M&A landscape. Buyouts are gaining traction as a key strategy for private equity firms aiming to capture the country's rapid growth, with the IT, manufacturing, financial services, and pharmaceuticals sectors emerging as hotspots for buyout activities.
—Jannan Crozier, Partner, London
Indian equities have shown resilience, with the Nifty 50 continuing to gain. India's GDP growth remains strong, driven by private consumption and rising investments.
While geopolitical tensions continue to pose risks, progress on bilateral free trade deals are positive factors for India’s economy.
— Ashok Lalwani, Partner, Dallas
India’s tech sector has been a hotspot for M&A, with multinationals eager to tap into the country's burgeoning tech ecosystem, particularly in areas such as AI, machine learning, and big data analytics. With the enactment of the new merger control regime, it is imperative that businesses work closely with their advisors to determine if their transaction value will require notification to the Competition Commission of India.
— Amar Budarapu, Partner, Dallas
Read more in our Spotlight on India series
Key takeaways
Sunny Mann, Global Chair-Elect and Global Chair of Partner, London shares, “India’s recent bilateral trade deal with the United Kingdom is the latest example of how diversification is creating new collaborations that can produce significant benefits for both India and its trading partners.”
H2 2025 brings rising investor confidence and liberalized FDI presents opportunity for businesses: As India continues its growth trajectory, underpinned by an increasingly liberalized FDI policy and business-friendly regulatory reform, the M&A landscape is expected to evolve. Investors will need to navigate this landscape carefully, leveraging India’s strategic advantages while staying abreast of the latest legal and regulatory developments to maximize their investment potential.
Businesses keen to unlock opportunities in the market need advisors who can simplify complexity and provide practical, actionable guidance. For more information, please contact Mini Menon vandePol.
Footnote:
1. Grant Thornton, India’s M&A Outlook in 2025
This article is being provided as general information and does not constitute legal advice. Baker McKenzie does not practice Indian law and where Indian law advice is needed, we work closely with top India-qualified lawyers. We’d be happy to discuss your needs in India.