• PL
Choose your location?
  • Global Global
  • Australian flag Australia
  • French flag France
  • German flag Germany
  • Irish flag Ireland
  • Italian flag Italy
  • Polish flag Poland
  • Qatar flag Qatar
  • Spanish flag Spain
  • UAE flag UAE
  • UK flag UK

India market and business update: January 2024

25 January 2024
Venture capital and private equity funds are poised to pay close attention to India's growth strategy in the coming years as it sets its eyes on an ambitious foreign direct investment target ahead of a national election.

India has unveiled ambitious plans to secure $100 billion annual Foreign Direct Investment (FDI) in the coming years. At the World Economic Forum in Davos, Ashwini Vaishnaw, the current Indian Telecom and IT minister, predicted a consistent annual growth rate of 6-8% over the next decade and touted the current Indian Government's plans to drive these economic ambitions ahead of a general election later this year.

India recorded FDI of around $71 billion in the 2022-2023 financial year, and the current Government has announced that it is looking to build on this aggressively for the coming years. Of particular interest to venture capital and private equity funds is the focus India is placing on streamlining regulatory processes and supporting international investment. To date, this has included initiatives such as:

  • 'Make in India', which aims to encourage foreign companies to set up manufacturing plans in India to support it to become a global manufacturing hub;
  • 'Invest India', which promotes and facilitates investment in the country through tailored incentive offers and business support for international investors; and
  • 'Start-Up India', which focuses on fostering an innovative and flourishing ecosystem for start-ups.

The country is also striving to provide lucrative opportunities for VC and PE funding in a number of booming sectors, notably including Technology, Telecoms, Infrastructure, Retail and E-commerce, Manufacturing, Financial Services and Life Sciences. This has attracted companies including several multi-national technology and manufacturing businesses to expand their Indian operations over the last decade. India's start-up ecosystem is also flourishing, with a steady rise in the number of innovative companies operating in the IT, E-commerce, HealthTech and FinTech sectors. As of May 2022, the Indian start-up ecosystem was ranked third globally with respect to unicorn count.  To date India has reached over 110 unicorns with a combined valuation of over $350 billion.

Further changes to India's business and regulatory landscape are expected as Vaishnaw made clear that simplifying processes to ease business is one of the key 'engines' to drive investment that India plans to utilise. The confluence of India's commitment to reduce the administrative burdens of investment, its young and dynamic workforce, and growing focus on key sectors of growth all underscore the nation's emergence as a key player in the global economic landscape.

Vaishnaw noted that investors now see India as the "most important investment destination" globally, and it is widely expected that PE and VC funds will undoubtedly increasingly look to India as an 'investor-friendly' environment to target strategic investment and opportunities in the coming years.

DWF is a leading legal adviser to Indian and India-focused companies, financial institutions and high net worth individuals and families. Our India Group, consisting of over 65 lawyers from 9 countries, 13 practice areas and 9 sector groups, is one of the largest India groups of any international law firm.  With decades of extensive expertise in guiding Indian clients in respect of outbound legal work, our team of experts and specialists empower both India-focused and India-based clients to achieve their strategic objectives.  If you have queries on any of the issues covered in this article, please contact one of our experts. 

We would like to thank Surya Kumaravel and Sarah Deloison for their contribution to this article. 

Further Reading