Indian Firms Increase Overseas Acquisitions

Indian Firms Increase Overseas Acquisitions

Indian companies significantly increased their outbound acquisitions in 2025, with 162 firms spending over $18 billion, marking a 34% rise from the previous year. This trend is driven by strategic and operational motivations, including market access, technology acquisition, and supply chain diversification, rather than solely symbolic global ambition. The largest deal involved Sun Pharmaceuticals' $11.75 billion acquisition of New York-listed Organon & Co. in late April, representing the biggest overseas purchase by an Indian company in nearly two decades.

This surge in foreign investment occurs amidst a slowdown in India's domestic economic growth, characterized by an exodus of foreign portfolio investors, reduced net foreign direct investment, and weak private sector investment. Despite corporate profit growth of 30.8% per annum among India's top 500 companies post-COVID, overall capital formation rates from the private sector have been disappointing. This domestic environment encourages Indian firms to seek growth opportunities abroad.

The acquisitions are supported by stronger balance sheets and improved access to global financing. Companies are increasingly looking to acquire technology capabilities, R&D expertise, and established distribution networks that would take years to build organically. While large, all-cash deals like Sun Pharma's carry financial risk, the long-term trend indicates continued overseas expansion, potentially accelerated by free trade agreements and a desire to hedge against domestic economic uncertainties.