Private equity and venture capital funds investing in India are increasingly turning to domestic pools of capital, including family offices, high-net-worth individuals and local institutions, as global investors become more selective in committing fresh money.
While India continues to attract strong investor interest, capital commitments are increasingly concentrated among a smaller group of established fund managers, experts said.
Between 2022 and 2024, the six largest private equity managers accounted for about 64 per cent of the $13.7 billion raised for India-focused funds, according to a survey of limited partners conducted by McKinsey & Company in partnership with Indian Venture and Alternate Capital Association. This shows a trend where limited partners prefer backing firms with proven track records of deploying capital and delivering exits.
Fundraising cycles have also lengthened, with investors globally placing greater emphasis on a manager’s ability to generate liquidity and return capital, they said. At the same time, fund managers are widening their search for investors within India, tapping family offices, wealthy individuals and domestic institutions to diversify their investor base.
Despite tighter fundraising conditions globally, dealmaking activity in India has remained resilient. Private equity and venture capital investments in the country reached $60.7 billion across 1,475 deals in 2025, an 8 per cent increase in value and a 9 per cent rise in deal volumes from the previous year, according to the latest EY–IVCA PE/VC Trendbook 2026.
Within the broader ecosystem, growth-stage investing is also gaining traction as investors look beyond early-stage startups and focus on scaling mid-sized companies. India-focused growth funds raised about $5.1 billion in 2025, a sharp increase from the previous year, while growth investments totalled $10.2 billion across 328 deals, according to a report by Praxis Global Alliance on India’s growth equity market.
“The year 2025 was a true testament to the resilience and maturity of the Indian PE/VC landscape,” said Vivek Soni, Partner and National Leader – Private Equity Services at EY India. “Even amid global macroeconomic and geopolitical headwinds, India has continued to see strong investor interest and deal activity.”
Industry participants say the opportunity for private capital in India remains significant, with a large number of mid-sized companies still outside the private equity universe. Some estimate that only around 10 per cent of investible Indian companies have received private equity or venture capital funding so far, leaving substantial headroom for future investments.
As global fundraising conditions remain uneven, the growing participation of domestic investors could play an increasingly important role in sustaining capital flows into India’s private markets.
Published on March 16, 2026
