India Leads the Way in Emerging Markets—What Sectors to Watch?
Takeaways:
- India remains the top choice for foreign LPs in emerging markets, according to Preqin’s annual investor surveys from 2020 to 2024. Over the past 15 years, India’s private AUM has more than tripled.
- Foreign LPs are actively partnering with GPs with a presence in India who possess deep market knowledge and strong networks.
- India’s exit market remains resilient, even amid a weak global exit environment.
- Sectors to watch: Green tech, AI infrastructure/verticals, Space Tech and semiconductors – bolstered by significant government initiatives.
Why Global Investors Are Betting Big on India
India's economy is expanding at an unprecedented pace, fueled by strong GDP growth, favorable demographics, massive infrastructure investment, and economic reforms. Global private capital players are eager to tap into the market.
- According to Preqin’s 2024 report Private Capital in India, India consistently ranks as the most attractive emerging market for foreign LPs, ahead of its regional peers.
- Private capital AUM in India has more than tripled in the past 15 years, reaching a record $124.3 billion by the end of 2023.
- LPs are increasingly pursuing co-investments with GPs with roots and on-ground presence in India to access high-quality deal flow without building their own local teams.
Navigating India’s regulatory and operational complexities requires deep market expertise and strong local partnerships and network, making established GPs critical for success.
India’s Exit Market Stays Strong Amid Global Slowdowns
Unlike many other global markets, India’s exit environment remains robust, driven by key structural changes:
- Public Markets Boom: A surge in retail investor participation has pushed Indian stock market indices to all-time highs, increasing domestic IPO activity.
- Private Equity & Sovereign Wealth Funds Expand Presence: Global PE firms and sovereign funds are increasing their India allocations, fueling secondary sales and exit pathways for early-stage investors.
- M&A Momentum: Strengthened balance sheets across Indian corporates, along with improved profitability in new-economy companies, are accelerating acquisitions and consolidations.
Sectors to Watch: India’s Policy-Backed Growth Areas
India’s government is aggressively incentivizing key technology sectors, creating compelling investment opportunities.
Semiconductors:
- India’s semiconductor market is projected to reach USD 110 billion by 2030, capturing 10% of the global market (Invest India)
- Semicon India Program: USD 10 billion initiative, offering 50% capital expenditure subsidies for semiconductor manufacturing and design.
- Budget for semiconductor projects increased by 83% to INR 70 billion for FY2025-26.
GreenTech:
- India has the 4th largest renewable energy producer at 191 GW (2024), with plans to grow it to 500 GW by 2030.
- The Ministry of New and Renewable Energy (MNRE) received an allocation of INR 191 billion for various renewable energy projects.
- The PLI scheme for Automobiles and Auto Components saw a rise from INR 34.69 billion to INR 281.88 billion.
- Energy efficiency programs received an allocation of INR 160 billion.
- E20 ethanol-blending policy is targeting 20% blending before the end of 2025, boosting biofuels and reducing fossil fuel dependence.
AI infrastructure/verticals:
- India AI Mission invites proposals for the development of large language models (LLMs) and multimodal AI systems and unveiling an 18,000-GPU cluster for advanced AI training.
- Its AI initiatives focus on agriculture, disabilities, and climate change.
SpaceTech:
- 100% FDI permitted under the automatic route for satellite components and systems, up to 74% for satellite manufacturing and operation, and 49% for launch vehicles and spaceports.
- Government-led Phase III of Space Based surveillance project, including the launch of 52 satellites, with 31 to be built by the private sector.
DefenseTech:
- India’s defense budget is growing by 9.53 percent YoY, to a record high of INR 681, 210 crore (USD $78.8 billion) for 2025-2026.
- Shift Towards Self-Reliance: Since 2014, India has moved from a military import-dependent nation to an emerging leader in indigenous defense manufacturing.
Enventure: Connecting Global Investors to India’s High-Growth Markets
At Enventure, we partner with global LPs to help them capture India’s immense market opportunities. As a US-based VC/PE firm, we bring an exit-driven investment approach, combining deep industry insights with boots-on-the-ground expertise in India.
We focus on investments at the intersection of megatrends—from human health, planetary health, and national security to geopolitics and technology-driven growth—to build a diversified, high-return portfolio.