China has been the dominant force in private market investment in Asia, attracting the bulk of global capital flows. But in 2024, a significant shift occurred—India surpassed China in private equity fundraising for the first time. This milestone marks a turning point in the region’s investment landscape and signals India’s growing appeal as a premier destination for global capital.
The shift has been driven by a combination of economic and geopolitical factors. In recent years, increased regulatory scrutiny in China has made it more difficult for private investors to operate, leading to a decline in capital inflows. At the same time, India has positioned itself as a stable, business-friendly market with high growth potential, attracting a growing share of foreign investments.
The data is striking. In 2021, India’s private equity fundraising was just 14 percent of China’s total. By 2023, that number had jumped to 59 percent. And in the first half of 2024, India’s private market fundraising exceeded China’s for the first time. This reversal reflects a broader trend of global investors reallocating their capital toward markets with more predictable regulatory environments and stronger long-term growth prospects.
The healthcare sector has been a major beneficiary of this shift. In 2019, India accounted for less than 10 percent of Asia-Pacific healthcare buyout transactions, while China commanded more than 40 percent. By 2023, India’s healthcare private equity transactions had grown sevenfold, surpassing China’s for the first time. Investors see India’s growing middle class, increasing healthcare spending, and expanding digital health ecosystem as key drivers of future growth.
Technology and financial services have also attracted substantial foreign investment. With India’s digital economy continuing to expand, companies in fintech, e-commerce, and enterprise software have become prime targets for global investors. The growing presence of late-stage funding rounds and mega deals in these sectors indicates strong confidence in the long-term potential of India’s technology ecosystem.
Government policies have played a crucial role in facilitating this shift. Unlike China, where regulatory crackdowns have created uncertainty for investors, India has implemented reforms to make foreign investment easier and more attractive. Streamlined tax policies, eased restrictions on foreign ownership, and greater regulatory transparency have helped create an environment that encourages global capital flows.
Challenges remain, particularly in infrastructure and regulatory bottlenecks. However, India’s ability to consistently attract foreign capital despite global economic headwinds suggests that the trend is likely to continue. As investors look for stable, high-growth markets, India’s private market landscape is increasingly seen as a leading destination for long-term capital deployment.
Surpassing China in private market fundraising is more than just a symbolic milestone—it is a reflection of India’s rising influence in global finance. With strong economic fundamentals, a growing consumer base, and an expanding ecosystem of high-growth companies, India is set to cement its position as the next major frontier for private investment.
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