Indian companies are buying more abroad even as foreign acquirers pull back from India, according to a report by Boston Consulting Group (BCG) released on Monday.
Outbound deal value, where Indian strategic buyers acquired targets outside the country, rose 76% to $8.8 billion in the first seven months of 2026 from $5 billion a year ago even as the number of outbound deals fell 19% to 92. Over the same period, inbound deal value, where foreign buyers acquired Indian targets, fell 58% to $2.7 billion. The domestic deal value, covering Indian buyers acquiring Indian targets, fell 14% to $10.1 billion, the data showed.
The overseas buying helped keep India’s overall M&A value nearly flat, down 2% so far this year, even though deal volume fell by roughly 20%. The drop in volume was slightly steeper than the global decline of about 18%.
“The Indian outbound story isn’t just the large conglomerates anymore. We are seeing mid-sized companies buy capabilities and market access abroad and that is a healthy sign on confidence,” said Dhruv Shah, managing director and partner, BCG.
BCG identified three reasons Indian companies are buying abroad. The first is the internationalisation of supply chains in sectors where Indian firms already compete globally, such as Sun Pharma‘s acquisition of Organon. The second is access to order books and business development capacity in established markets, as with LTM‘s purchase of Randstad and Mphasis’s acquisition of Theory and Practice Business Intelligence.
The third, which the report calls arguably the most consequential, is buying capabilities that cannot readily be sourced in India, chiefly AI-enabled IT services. BCG cited Coforge‘s acquisition of Encora and Infosys’s deals for Versent and Stratus. IT services buyers, it said, have rotated out of business process outsourcing, cybersecurity and data analytics and into verticalised AI capability, choosing to buy rather than build.
The shift overseas came as buyers across the market placed fewer but larger bets. Deals worth more than $1 billion made up half of India’s deal value in January-July 2026, up from 34% a year earlier, while deals above $500 million accounted for 59%, against 49%. Transactions above $100 million held up better than the broader market, with 45 deals so far this year against 51 in the same period of 2025 and 37 in 2024.
Most of the contraction was in small deals. Transactions below $1 million accounted for about half of the fall in deal volume, far more than their share of total deals, the report added. BCG said this reflected investors’ caution towards deals that did not move the needle or involved less proven segments.
The report also attributed the slowdown to rich public-market valuations widening the gap between buyer and seller expectations, alongside tariff and war related uncertainty and rupee depreciation. It said capital availability was not the constraint, with dry powder at India-focused funds above $20 billion, according to Preqin data cited in the report.
BCG said stock markets have rewarded this greater selectivity. M&A announcements by listed companies this year generated a median 30-day relative shareholder return of 3.7%, compared with -0.4% in 2024 and -2.7% in 2025.
“Volumes have fallen while the market is rewarding those that still transact with conviction. This suggests boardrooms should keep their M&A engines always on and reconsider how and when they choose to tap these markets, rather than pausing until sentiment turns,” said Kanchan Samtani, managing director and senior partner, BCG.
Source: The Financial Express
