Private equity investment in India has slowed sharply as global buyout firms grow more cautious amid elevated asset valuations, weakening macroeconomic signals, and geopolitical uncertainty affecting energy markets, according to a report by the FT.
The report cites new research by Bain & Company and the Indian Venture and Alternate Capital Association as revealing that total private equity deal value in India fell 33% year on year to $19.6bn in 2025, underscoring a marked cooling in one of Asia’s most closely watched investment destinations.
India had previously been a major draw for global sponsors such as Blackstone and KKR, with firms committing tens of billions of dollars to capture growth opportunities outside China. However, the latest data suggests that deployment has become increasingly selective as sellers continue to anchor expectations to prior peak valuations.
According to Bain, overall sentiment remains constructive on long-term fundamentals, but deal execution has slowed significantly. A Bain partner based in New Delhi said market conditions remain “muted,” adding that investors are “being very selective” despite continued confidence in structural growth prospects.
The slowdown comes against a backdrop of broader financial market volatility, including disruption to global energy flows linked to Middle East tensions. India, as the world’s third-largest oil importer, has been particularly exposed to recent spikes in energy prices and supply uncertainty.
Foreign portfolio investors have withdrawn more than $20bn from Indian equities since the onset of the latest geopolitical escalation, placing additional pressure on the rupee and dampening risk appetite.
Macroeconomic strain has also begun to filter through growth expectations. UBS recently lowered its GDP forecast for India to 6.2% from 6.7%, citing energy shocks, supply chain disruption, and expectations of weaker monsoon conditions.
Despite a near 11% decline in the Nifty 50 index, Indian equity valuations remain elevated relative to regional peers, with forward price-to-earnings multiples still above 20x, according to Goldman Sachs. This has contributed to a persistent gap between buyer and seller expectations in private transactions.
While capital remains available – with an estimated $15bn in dry powder targeting Indian opportunities – a shortage of attractively priced assets continues to delay deal activity. At the same time, global investors are increasingly reallocating attention toward artificial intelligence-related opportunities, further competing for allocation bandwidth.
Bain noted that private equity buyout activity, including venture capital investment, declined 17% to $36bn in 2025, even as global dealmaking rebounded more broadly, highlighting India’s relative underperformance in the current cycle.
