India’s private markets: The global limited partner view

India's private markets have emerged as the strongest performing region in Asia–Pacific, attracting substantial capital flows as global limited partners reorient allocations away from slowing markets. Between 2021 and 2025, private equity and venture capital investment activity reached $207 billion, a 1.6-fold increase from the 2016–20 period. Exit activity during the same window more than doubled to approximately $120 billion, signaling improved investor confidence and portfolio maturity. This expansion reflects India's elevated regional standing as geopolitical shifts and supply-chain reconfiguration continue to pressure broader Asia–Pacific investment activity.

However, India's private markets face a critical structural imbalance. While aggregate investment volumes have expanded, private-capital intensity relative to GDP has stagnated, indicating that growth has not translated into proportional market deepening. McKinsey's survey of more than 50 global limited partners reveals that capital deployment remains highly concentrated: a handful of sectors dominate private markets activity, while sectors central to India's long-term growth ambitions—including infrastructure, healthcare, and financial inclusion—remain materially underinvested. This sectoral concentration mirrors a severe fundraising concentration among general partners, where the six largest GPs accounted for 64 percent of the $13.68 billion raised between 2022 and 2024, compared to 59 percent during 2016–18. The widening disparity underscores a winner-take-all dynamic that favors established fund managers while limiting capital access for emerging and mid-market GPs.

Global limited partners rank India as their top investment destination within Asia–Pacific, yet the narrowness of the capital pool remains a material constraint on future growth. Addressing these structural limitations—expanding the diversity of investable sectors, broadening the distribution of capital among fund managers across tiers, and deepening the institutional infrastructure supporting private markets—could unlock additional investment opportunities and enable more balanced capital allocation across asset classes and geographies. The ability to sustain India's momentum as a preferred emerging-markets destination for private capital will depend on market participants' success in distributing capital beyond current concentration points.