Private Markets Investors Increasingly Favour India over Peers in APAC

Why It Matters

The shift signals a reallocation of capital toward India’s high‑growth economy, reshaping APAC private‑equity dynamics and creating demand for more diversified local fund managers.

Key Takeaways

• 31% of LPs rank India top APAC destination.
• 76% place India in top three investment choices.
• Private markets represent 64% of LP allocations to India.
• Deal value $207bn (2021‑2025), 1.5× prior period.
• Exits doubled to $120bn, showing strong liquidity.

Pulse Analysis

India’s emergence as the premier private‑markets hub in APAC reflects a broader rebalancing of global capital toward economies with scalable growth and resilient consumer demand. The McKinsey‑IVCA survey shows that a third of institutional investors now view India as their top regional target, driven by a youthful entrepreneurial base, robust GDP momentum, and expanding domestic consumption. This sentiment is reinforced by a surge in deal volume, with total transaction values climbing to $207 billion between 2021 and 2025—more than 1.5 times the previous five‑year period—and exits more than doubling, underscoring a maturing exit environment.

Sectoral concentration further clarifies where capital is flowing. Technology, IT services, financial services, pharmaceuticals, healthcare and consumer businesses have absorbed nearly three‑quarters of private‑equity and venture capital deployed since 2021, indicating that investors are targeting scalable, digitised business models that can leverage India’s large, increasingly affluent population. The appetite for buyout and growth‑stage strategies is especially pronounced, as limited partners anticipate higher returns from mature companies poised for expansion rather than early‑stage ventures alone. This sector focus aligns with the country’s structural advantages, including a strong pipeline of tech talent and a regulatory climate gradually favouring private investment.

Despite the optimism, the survey highlights a critical bottleneck: fundraising remains dominated by a handful of large general partners, limiting the depth of the private‑capital ecosystem. To sustain inflows and meet the growing demand for diverse strategies, India must cultivate a broader base of high‑quality GPs capable of sourcing and managing deals across the spectrum. Policymakers and incumbents are therefore encouraged to support fund formation, talent development, and secondary market liquidity, ensuring that the country can fully capitalise on its rising share—now about 21%—of APAC private‑equity deployment. The next five years will likely see intensified competition among global LPs seeking exposure, making ecosystem diversification a strategic imperative.