Since the publication of our first report, "Navigating India: Lessons for Foreign Investors," in 2013, India has undergone a remarkable transformation. The country's population grew by 100 million. Fuelled by improved connectivity and digital infrastructure, the number of internet users has soared, with more than half of its citizens now connected to the internet— a significant increase from the mere 12 per cent recorded in 2013. India's GDP has more than doubled, rising from US$1.8 trillion in 2013 to US$3.9 trillion in 2024, underscoring the nation's robust growth trajectory. Per capita income has also improved, reaching US$2,700 in 2024 compared to US$1,400 in 2013.
The Indian government's ambitious programme of regulatory reforms, aimed at making the country an attractive option for international investors, is clearly bearing fruit. In the World Bank's 2020 "Ease of Doing Business" report, India rose to the 63rd position out of 190 countries, marking a significant improvement from its 134th place in 2013. In this compendium, we highlight business opportunities and discuss some of challenges India faces today.
One such challenge is the high-valuation multiples of Indian companies, which have historically dampened cross-border M&A. While these high-valuations present lucrative opportunities for businesses to monetise through listings, they also pose challenges in structuring deals, particularly those involving India-listed subsidiaries and combinations with non-Indian businesses. However, recent regulatory changes, such as permitting share swaps and foreign investors' growing acceptance of Indian securities, are paving the way for innovative deal structures.
India's commitment to achieving net-zero by 2070 is another key issue. The country is pressing ahead with legislative reforms and investment into energy transition on an unprecedented scale, with renewables at the heart of this drive. India has the potential to increase its renewable energy production vastly—whether in solar, wind, hydro, hydrogen or other forms of renewables—and it is making various incentives available to accelerate that process. Legislation and new schemes should make the country even more attractive to investors, and indeed the efforts are already paying off, with a significant number of large investments being committed in recent years.
Technology is also a growth sector. Several multibillion-dollar deals by companies such as Amazon and Apple emphasise the potential of the tech economy. Meanwhile, in infrastructure, the introduction of products such as infrastructure investment trusts and real estate investment trusts make investment by foreign companies more attractive
However successful an investment, there will come a time to exit. In this issue, we examine two ways of exiting Indian investments: through general partner-led secondary transactions and through the public market. Those wishing to exit must plan ahead and put the necessary protections into their documentation at an early stage to avoid potential pitfalls down the track.
India has also made significant strides in reforming its alternative dispute resolution framework, aiming to position itself as a global hub for international arbitration. The 2021 Mediation Bill is another progressive step in making commercial disputes easier to handle, and the supportive stance of Indian courts has amplified positive effects of the legislative reforms.
Investing in India has never been more attractive for foreign investors, and we hope you will find this issue an insightful read.
Against a challenging macro-economic environment worldwide, India has proven resilient and demonstrated its huge potential for growth. With an increasingly favourable regulatory regime and greater avenues of investment, India’s attractiveness as a global market for investors will only continue.
India stands out globally as a market with strong growth in IPO volume, thanks to its dynamic regulatory framework, robust domestic capital market and a large retail investor base. IPOs are also gaining popularity among foreign investors as one of the available exit options from their investments.
Foreign investors in India have historically faced numerous challenges, from high-valuation multiples to regulatory limitations, but evolving market conditions are cause for hope.
The Indian government is pressing ahead with legislative reforms and investments on an unprecedented scale in the energy transition.
The market for private equity-led secondary transactions is growing, and India is steadily catching up with the global trend in embracing these innovative exit strategies.
In the past decade, India has made significant strides in reforming its alternative dispute resolution (ADR) framework, aiming to position itself as a global hub for international arbitration. The supportive stance of Indian courts towards arbitration has amplified the positive effects of these reforms.
