Indian companies are executing a comprehensive global expansion strategy through strategic acquisitions, marking a significant shift from previous scale-focused overseas investments. According to Grant Thornton Bharat, Indian companies announced 162 outbound mergers and acquisitions worth $18.2 billion in 2025, with the momentum continuing into 2026. The first quarter of CY2026 saw 56 overseas acquisitions valued at $3.9 billion, with outbound transactions accounting for 84% of India's total M&A value during the April-June quarter. This represents a structural change from the 2005-10 wave that focused on establishing global footprints through transformational deals like Tata Steel's $12 billion Corus acquisition, Hindalco's $6 billion Novelis purchase, and Tata Motors' $2.3 billion Jaguar Land Rover deal. Recent transactions reinforce this trend, with Sun Pharmaceutical Industries' $11.75 billion acquisition of US-based Organon and Bharti Airtel's $2.97 billion increase in its stake in Airtel Africa emerging as marquee outbound transactions that reflect how Indian companies are increasingly pursuing deals to expand market access, gain key technologies and products, and consolidate strategic assets overseas.
Digital transformation is emerging as a central driver of India's investment appeal, with artificial intelligence and data analytics reshaping business decision-making across industries. According to ETMarkets NRI Talk, the Nifty 50 delivered 8.8% returns in CY2024 and remained largely flat in CY2025, while foreign investors pulled out nearly US$30 billion (over ₹2.2 lakh crore) from Indian equities in CY2026. However, India's growing digital economy continues to attract international investors, particularly within technology, fintech, software development, and digital infrastructure sectors. The rise of digital enterprises has contributed positively to foreign investment in India, with strong digital ecosystems encouraging capital inflows by creating opportunities for innovation, collaboration, and long-term value creation. As Abakkus Investment Managers noted, India's recent underperformance has been driven more by sentiment and elevated valuations than by any weakness in economic fundamentals, with the asset manager maintaining that India's long-term investment case remains firmly intact.
Indian companies are now pursuing acquisitions with enhanced financial capabilities and strategic precision, with digital transformation capabilities becoming a key acquisition criterion. Sun Pharmaceutical Industries' $11.75 billion acquisition of US-based Organon exemplifies this evolution, with the company entering the deal in a net cash position and funding part of the acquisition through internal accruals. The combined entity expects a pro forma net debt-to-EBITDA ratio of around 2.3 times and plans to deleverage rapidly using annual free cash flows of nearly $2.5 billion. According to Mohit Chopra, Partner and Deals Leader at PwC India, "Outbound M&A is increasingly becoming a strategic extension of Corporate India's growth agenda." The focus has shifted from buying scale to acquiring artificial intelligence capabilities, intellectual property, specialty drug portfolios, engineering expertise, established brands and access to developed markets. As Amit Khandelwal, Managing Partner – Strategy & Transactions at EY India & Africa, explained, "The focus has shifted because the most valuable competitive advantages today come from innovation, technology, customer access and specialized know-how, not simply operating size." Unlike the overseas bets of the mid-2000s, companies are now spending significantly more time on regulatory due diligence, sanctions reviews, tax structuring, intellectual property ownership and post-merger integration before signing transactions.
The RBI's FCNR(B) relaxation has proven highly effective in attracting foreign capital, with deposits crossing US$26 billion in just 45 days since the June 8 announcement. As reported by ETMarkets NRI Talk, this represents a significant milestone as it has already matched and likely surpassed the US$25-26 billion raised under the 2013 scheme. The broader package has attracted around US$32 billion in inflows, providing India with a nearly 5% increase in its durable FX buffer and strengthening the country's external position with foreign exchange reserves currently at US$676 billion. This enhanced capital availability has enabled Indian companies to pursue overseas acquisitions more efficiently, with PwC India noting that outbound transactions accounted for 17.6% of India's total M&A deal volume in the first half of 2026, compared with 15% a year earlier and 12.4% in H1 2024. The current cycle is much more selective and capability-led than previous acquisition waves, with companies spending significantly more time on regulatory due diligence, sanctions reviews, and post-merger integration before signing transactions.
The current acquisition wave spans multiple sectors, with manufacturing and pharmaceuticals leading by deal volume while telecom accounts for the highest deal value. According to Grant Thornton Bharat, manufacturing and pharmaceuticals were among the most active sectors by deal volume in recent months, while telecom accounted for the highest deal value, led by Bharti Airtel's $2.97 billion increase in its stake in Airtel Africa. IT companies are acquiring AI, cloud and digital engineering capabilities, pharmaceutical firms are targeting specialty products and regulated-market assets, while automotive and industrial companies are scouting for EV technologies, advanced engineering capabilities and electronics expertise. The shift reflects companies' need to strengthen their ability to compete across markets, technologies and business cycles through immediate access to specialized capabilities rather than developing them organically over years. India's Overseas Investment Rules, Regulations and Directions, introduced in 2022, have also brought greater clarity to outbound investments, making cross-border transactions more structured than in the previous cycle.
While the acquisition momentum continues, experts highlight significant integration challenges that could impact success rates, even as digital transformation creates new investment opportunities. Bhavesh Shah from Equirus Capital emphasized that "The biggest risk is integration. Acquisition can fail if cultures, management teams and operations are not integrated effectively. Companies also need to remain disciplined on valuations, financing and carefully manage geopolitical, regulatory and currency risks." PwC India points to structural shifts in deal volumes, with outbound transactions accounting for 17.6% of India's total M&A deal volume in the first half of 2026, compared with 15% a year earlier. However, Abakkus Investment Managers maintains an optimistic long-term outlook, stating that India's long-term investment case remains firmly intact despite recent underperformance. The fund house noted that India could attract fresh foreign inflows over the next 6-12 months as global investors rebalance their portfolios, while India offers more diversified sector exposure than several emerging markets. Digital transformation is expected to remain a central component of India's economic development strategy, with emerging technologies such as artificial intelligence, blockchain, advanced analytics, quantum computing, and smart infrastructure creating new investment opportunities across financial services, healthcare, manufacturing, consumer technology, and infrastructure sectors.
