India Overtakes China in the PE Growth Race

According to PitchBook data, India’s PE market activity—indexed to 2014 as the base year—has surged past both China and Japan. The trend is underpinned by sustained domestic demand, an expanding digital economy, and rising favorability among global investors disillusioned with China’s geopolitical and regulatory climate.

Here’s the chart you should care about: Indexed PE activity (2014 = 100) shows China stalling, Japan climbing slowly, and India accelerating. In 2024, India recorded $22B in deal value across 200+ transactions, while PE AUM hit $34.4B, up sharply from the last decade. Foreign firms are doubling down: Blackstone plans to grow its $50B Indian AUM, Bain is targeting $5–7B in new investments, and Permira shuttered its Greater China offices to focus on India.

Trade war tailwinds are amplifying the shift. While China absorbed a 145% US tariff hit, India secured a 90-day reprieve and fast-tracked a new bilateral deal. That’s translating into investor confidence and tangible flows—83% of PE exits in India last year came through public markets, totaling $44.7B, led by mega-IPOs like Bajaj Housing and Hexaware.

FDI inflows echo the trend, with $1.05T+ cumulative inflows since 2000 and growing at a CAGR of 5.1% since 2014. Tech and services dominate, but new capital is now pouring into sectors like renewables and defense. Government moves—from 100% FDI in space and MRO to corporate tax cuts and simplified FEMA rules—signal that India is structurally tilting the playing field to favor inbound investment.

The bottom line: India is no longer the “next big thing.” It’s the current big thing—especially as China and Japan face demographic, regulatory, and geopolitical constraints. For GPs recalibrating APAC exposure, India now represents both the hedge and the headline.