Global investors are increasingly backing India-focused private market funds, with more than half of the limited partners (LPs) planning to raise their allocation while only 5% expect to cut exposure, according to a report by McKinsey & Company.
The survey, conducted with Indian Venture and Alternate Capital Association (IVCA), covering more than 50 global LPs found that India is emerging as the most attractive private-market destination in the Asia-Pacific region, with 31% of respondents ranking it as their top investment bet.
The growing interest in India comes at a time when private-market investment activity across Asia-Pacific is seeing a broad slowdown amid geopolitical tensions and macro volatility. “However, India has emerged as an increasingly attractive destination for limited partner allocators. Its regional weight has increased amid China’s slowdown,” the report says.
Investment activity by PE-VC firms in India increased about 1.6 times to $207 billion between 2021 and 2025 compared with the previous five-year period, while exits more than doubled to around $120 billion during the same period.
This rising activity has strengthened India’s standing among global investors seeking exposure to fast-growing markets. Within Asia-Pacific, India accounted for 21% of PE-VC investment during 2020-24, up from 12% in 2015-19. In contrast, China’s share of regional investment declined to 37% from 55% over the same period.
Large global investors with higher allocations to Asia tend to view India as a complex but scalable opportunity-rich market with significant potential for long-term value creation. However, the report also notes that, despite rising investor interest, the overall capital pool in India remains narrow and private-capital intensity relative to the country’s GDP has stagnated.
“Private-capital deployment across asset classes was $44 billion in 2025, with its share relative to the country’s GDP more than doubling to 1.42% in the past decade compared with 0.68% from 2006 to 2015,” the report says.
Investment deployment is also concentrated in a limited number of sectors, while other sectors central to India’s growth ambitions do not attract meaningful private-market investment.
The same trend can be seen in fundraising among fund managers. For instance, while fundraising by domestic private equity firms has increased across the board, the six largest general partners (GPs) accounted for 64% of the total of $13.68 billion raised between 2022 and 2024.
Nevertheless, the report adds that India’s attractiveness as a destination for alternative investors seeking diversified long-term growth may further increase as India’s share of global GDP is projected to rise to 7% by 2050, from 3.7% in 2025.