While geopolitical uncertainty has made dealmaking more cautious, investor confidence remains strong, with cross-border deal values surging and 2026 expected to see continued resilience in high-value transactions.

Overall deal activity in the country jumped 18 per cent by value to USD 123.8 billion in 2025, despite a 3 per cent drop in the number of transactions, a report said on Monday.

The country had witnessed deal values of USD 106.3 billion in 2024.

The market shifted toward fewer but larger transactions, EY, a consultancy firm, said in the report, adding that strategic assets in infrastructure, financial services and cross-border merger and acquisition transactions were preferred.

"Investors are not stepping away from India; they are becoming more selective. Instead of pursuing multiple smaller opportunities, they focused on deals that offered long-term relevance at valuations that made sense amidst heightened business risk premium," its Managing Partner for strategy and transactions Amit Khandelwal said.

Deal activity in 2026 is expected to remain resilient, with dealmakers increasingly focusing on mature, high-value transactions, the firm said.

Underlining that investor confidence in India remains intact, the report said geopolitical uncertainty and an extended energy crisis are leading to more cautious underwriting, longer transaction timelines, and a heightened focus on due diligence.

In 2025, infrastructure led in deal values with a 35 per cent growth in total transaction volume to USD 24.6 billion, it said, adding that the number of deals were down 18 per cent in the segment.

Industrial and automotive sectors reported the highest growth in deal value during the year, rising 105 per cent on-year alongside a 4 per cent increase in volumes. Private equity activity in the manufacturing sector remains robust, with investors gravitating toward engineered products, auto components, precision manufacturing, and electronics.

Cross-border deal volumes declined by 20 per cent in 2025, but their combined value jumped 155 per cent to USD 33.2 billion.

The year saw a notable surge in inbound deals, with global companies showing renewed interest in Indian assets across infrastructure, technology, and industrials as they realigned global value chains, it said.

Published on April 21, 2026