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Over the last two decades, global private equity (PE) firms have approached Asia with an overarching thesis: Capture growth by backing emerging champions in fast-growing economies. For years, this led to capital concentration in China — a market defined by scale, speed, and early-stage dynamism. But as China contends with mounting geopolitical scrutiny, tariff wars, and structural slowdown, the Asian investment lens is undergoing a quiet recalibration. Increasingly, global general partners (GPs) are not just diversifying beyond China — they are re-prioritising India as a long-term strategic hub, rather than merely a hedge.
This shift is not driven by capital availability alone. It stems from a reappraisal of risk-adjusted opportunities. India today offers a compelling combination of macroeconomic resilience, entrepreneurial depth, and institutional maturation. More importantly, it offers a canvas for control-oriented strategies, platform-building, and value creation in sectors where global know-how can be productively applied to local complexities. The opportunity is not in replicating Silicon Valley in Bengaluru; it is in adapting global capital to the distinctive rhythms of Indian growth.
The realignment of strategy by global funds is not simply about replacing China with India. It’s about recognising that India represents a different kind of value creation arc — one that is longer-tailed, structurally messier, but increasingly worth the investment in operational depth. India offers scale, yes — but with friction. It offers growth, but often uneven. To succeed here, global GPs must not only deploy capital, but they must also localise conviction, management bandwidth, and value-add muscle.
In contrast to China’s state-driven industrialisation and digital nationalism, India’s private sector has evolved under a federal, competitive, and often chaotic market environment. This creates an investment context that rewards iterative, operationally-intensive strategies. For global funds, it means a pivot from capital leverage to execution leverage. No longer can capital be the only differentiator; what matters now is the ability to partner with founders, build leadership teams, institutionalise processes, and cultivate long-term governance.
This change is reflected in how deals are being structured. Earlier waves of global private equity (PE) in India were dominated by minority growth capital: Patient, passive, and dependent on promoter alignment. Today, the needle is moving towards control deals, structured buyouts, and long-hold platforms. These structures allow GPs to exert deeper influence; not just in strategic planning but also in hiring, digital transformation, and cross-border expansion. Importantly, this approach aligns well with a new generation of Indian founders and family business heirs who are more open to co-leadership models, shared governance, and aligned monetisation.
Platform creation has become a preferred entry and expansion strategy for global funds operating in India. Rather than back a single company, many GPs now aim to build multi-asset platforms in sectors like health care, financial services, and industrials — areas that are fragmented, under-capitalised, and ripe for consolidation. This approach allows for operational integration, brand centralisation, and efficiency gains that are difficult to achieve in one-off deals. The challenge, however, lies in execution: Talent gaps, regulatory ambiguity, and slow-moving supply chains require patient capital with a high tolerance for ambiguity.
Yet India’s institutional scaffolding has improved considerably. Legal protections for investors, financial reporting standards, and board governance have strengthened across the mid-market. Exit mechanisms have diversified as well. Beyond traditional initial public offerings, sponsor-to-sponsor transactions, secondary sales, and continuation funds are increasingly viable, particularly in sectors where scale and visibility have been achieved. These developments have enabled global funds to craft sophisticated holding strategies, allowing for value realisation without forced exits.
However, global investors must temper optimism with realism. India is not a plug-and-play market. Business models can be local but non-scalable. Talent is abundant but uneven. Regulatory clarity exists, but enforcement is often inconsistent. Many sectors operate in informal or relationship-driven ecosystems where formal capital is only one piece of the puzzle. Global GPs must, therefore, deploy more than capital; they must build long-term institutional capacity, both within their portfolio companies and within their own India operations.
The most successful global investors in India have embraced what could be called a “local orchestration model.” They localise decision-making, hire senior India-based talent with operational authority, and align incentives across global and domestic teams. They recognise that value creation in India requires understanding context — regulatory rhythms, supply chain realities, founder psychology, and even state-level economic politics. In that sense, India demands a hybrid investing model: Global in rigour, but local in rhythm.
For global limited partners (LPs), India also offers an opportunity to rethink return profiles. The expectation of outsized internal rates of return (IRRs) from early-stage growth is giving way to a more nuanced understanding: India is a compounding market, not a windfall one. Real returns accrue to those willing to stay the course, reinvest in winners, and create operating leverage over time. From this perspective, India isn’t a tactical bet but a strategic allocation.
As the world becomes more multipolar and the race for resilient, scalable growth intensifies, India will continue to rise in the global PE hierarchy. But its rise will not be defined by the quantum of capital alone—it will be defined by the quality of engagement. For global funds, the winners will be those who understand that local bets in India require global patience, deep empathy, and execution excellence. In return, India offers something rare in today’s volatile global markets: The promise of durable, compoundable value in a structurally ascending economy.
The authors are, respectively, adjunct professor, IMT Ghaziabad, and associate professor of marketing, Indian School of Business . The views are personal
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper
