Indian Billionaires Go Global Amid Sluggish Domestic Growth
There's a notable shift taking place as Indian billionaires ramp up overseas acquisitions, largely in response to a slowing economy at home. The latest example is Sun Pharmaceuticals, which recently committed to buying New York-listed women's health firm Organon & Co. for a staggering $11.75 billion. This deal stands out as the most significant overseas acquisition by an Indian corporation in nearly two decades and reflects a broader trend where companies are looking beyond India's borders for growth.
This uptick in international deals isn’t an isolated incident. Companies like Tata Motors, which acquired the Turin-based Iveco for $4.4 billion, and IT services firm Coforge, which purchased Silicon Valley-based Encora for $2.35 billion, indicate that Indian firms are actively hunting for opportunities abroad. To add to this momentum, the Bajaj Group recently acquired a 23% stake in global insurance powerhouse Allianz SE.
According to research from Grant Thornton, 162 Indian firms spent over $18 billion on outbound acquisitions in 2025 alone—an impressive 34% increase compared to the previous year. Sumeet Abrol, a partner at Grant Thornton, mentioned that we're on track to exceed $15 billion in deal value during the first half of this year, suggesting that this trend is only gaining steam.
While similar waves of global expansion by Indian companies were seen two decades ago—with Tata Group's high-profile purchases of Jaguar Land Rover and Corus Steel—this influx of acquisitions has different underlying motivations. Analysts argue that firms today are not merely pursuing Western assets for prestige, but are strategically acquiring them to bolster their global operational capabilities and diversify their market presence.
The economic landscape today starkly contrasts with that of the early 2000s. Back then, India benefited from a booming market, whereas current conditions feature a disconcerting exit of foreign portfolio investors and a notable decline in foreign direct investment. Despite some companies reporting strong profit growth post-Covid, the overall capital formation rates are underwhelming.
"It's clear that corporate profits among India's leading companies have soared, averaging a growth rate of 30.8% annually," said V. Anantha Nageswaran, India's Chief Economic Advisor, during a recent policy discussion. His remarks highlight the disconnection between profitability and reinvestment in the local economy—a dynamic prompting many firms to look elsewhere for expansion.
As local investors become increasingly disenchanted with the domestic environment, they're finding better prospects abroad. Saurabh Mukherjea from Marcellus Investment Managers emphasized that capital is flowing out of India, with many firms setting up operations in lower-cost locations like the U.S., where industrial land is more accessible and acquiring working capital is considerably easier.
And it’s not just the industry titans making headlines; a significant number of smaller companies are also capitalizing on this trend, investing in greenfield projects and smaller acquisitions. This wave of foreign investments appears to be driven by enhanced financial strength and improved access to global funding avenues. Neha Singh of Tracxn noted that Indian firms are increasingly on the hunt for markets, brands, technological capabilities, and distribution networks that would ordinarily take years to cultivate.
As global geopolitical tensions create uncertainties in supply chains, the urgency for these acquisitions intensifies, fueling even more outbound investments. While the landscape may seem daunting, this strategic pivot toward international markets could play a critical role in shaping the future of Indian businesses.Future of Indian Outbound Acquisitions: Cautiously Optimistic
When it comes to overseas acquisitions, the track record is decidedly mixed. Take Tata Steel's acquisition of Corus Steel, for instance. This deal has been labeled an “albatross” by industry insiders, burdening Tata Steel for years rather than enhancing its portfolio. Such outcomes highlight a critical risk for companies considering expansion beyond Indian borders.
Despite these cautionary tales, the tendency for Indian firms to pursue international deals is unlikely to wane. Current discussions around a series of new free trade agreements involving India, the UK, Europe, and Australia signal a potential surge in outbound investment. As industry analyst Mukherjea suggests, these arrangements could lead to a rapid increase in Indian firms establishing a foothold in Western markets.
However, it's concerning that even with large transactions—like Sun Pharma's recent move—Indian companies have predominantly relied on cash deals instead of using shares. This diminishes financial flexibility and reflects a lack of confidence in their own stock valuations, which could be a serious red flag for investors.
Adding to this complexity is the socio-economic backdrop: many emerging business leaders are choosing to live and study abroad. Their inclination to hold assets in stable foreign currencies stems from the rupee's depreciation, noted to lose nearly 40% of its value against the dollar every decade. This tendency not only emphasizes individual wealth preservation but highlights a shift in where India’s economic ambitions are directed.
Yet, against this outward push lies a backdrop of internal challenges. India faces sluggish demand and low private sector investment, exacerbated by global energy crises and the evolving risks posed by advancing technology, particularly in artificial intelligence. The outlook for meeting or surpassing last year’s outbound investment figure of $18 billion is murky, as noted by Grant Thornton’s Abrol, largely due to current “geopolitical air pockets.”
In the long run, the unmistakable trend is that Indian corporations will increasingly seek to buffer themselves against a backdrop of burgeoning economic uncertainty at home. The government’s simultaneous effort to nurture foreign capital inflows plays into this narrative, aiming to boost domestic growth while staving off dollar outflows.
So, if you're in the investment space, keep a close eye on these dynamics. There's a clear tug-of-war between the allure of foreign acquisitions and the stark realities of the domestic market. The next couple of years will be telling; will the allure of overseas growth prove too strong for Indian companies to resist?
