Indian billionaires buy foreign companies as growth slows at home

Indian Billionaires Pursue Global Expansion Amid Domestic Growth Slowdown

Indian billionaires buy foreign companies as growth – As India’s economic momentum wanes, a wave of strategic acquisitions by Indian firms is reshaping their investment landscape. The latest example came in late April when pharmaceutical giant Sun Pharmaceuticals finalized a $11.75bn (£8.59bn) purchase of Organon & Co., a New York-based company specializing in women’s health and biosimilars. This transaction, the largest overseas acquisition by an Indian entity in nearly two decades, signals a shift in how domestic businesses are approaching global markets. It follows a series of notable international deals that have defined the past year, including Tata Motors’ $4.4bn acquisition of Turin-based vehicle manufacturer Iveco, Coforge’s $2.35bn buyout of Silicon Valley’s AI firm Encora, and the Bajaj Group’s 23% stake in Allianz SE earlier in 2025.

Outbound Deals Surge, Outpacing Domestic Investment

According to Grant Thornton, a consultancy firm, Indian companies spent over $18bn on overseas acquisitions in 2025, representing a 34% rise compared to the prior year. This figure has raised eyebrows, with Sumeet Abrol, Grant Thornton’s partner and national leader, predicting that the total deal value could surpass $15bn in the first half of 2025 alone. “It’s a clear sign that Indian firms are increasingly prioritizing international expansion,” Abrol remarked to the BBC.

While these acquisitions may remind some of the bold moves made by the Tata Group two decades ago, the current wave appears driven by distinct factors. Unlike the earlier era, which was fueled by a booming domestic market and a desire to secure global prestige, today’s deals are more about acquiring tangible assets and capabilities. Analysts note that Indian companies are now targeting Western markets not just as symbols of ambition, but to gain competitive advantages in sectors like technology, manufacturing, and research. This strategic shift has been amplified by a changing economic landscape that contrasts sharply with the conditions of the early 2000s.

Domestic Challenges Fuel the Overseas Trend

The Indian economy is currently navigating a complex set of challenges. A rapid decline in foreign portfolio investments, a slowdown in net foreign direct investment (FDI), and a lackluster response from the private sector to government incentives have created a more cautious domestic business environment. “Despite tax cuts and production-linked subsidies, our capital formation rates remain below expectations,” said V Anantha Nageswaran, India’s chief economic advisor, at a recent policy conference. He highlighted that while corporate profits for the top 500 companies grew at 30.8% annually post-pandemic, the private sector’s appetite for investment has not matched this growth.

For many Indian firms, the push to acquire foreign assets reflects growing dissatisfaction with the domestic market. Saurabh Mukherjea of Marcellus Investment Managers noted that companies are increasingly setting up greenfield factories in the US and other regions where industrial land is cheaper and working capital is more accessible. “It’s not just about visibility; it’s about operational efficiency and long-term viability,” Mukherjea explained. The trend is further supported by the improved financial health of Indian corporations, which now have stronger balance sheets and better access to global financing. Neha Singh, co-founder of Tracxn, a data intelligence firm, added that these acquisitions allow companies to bypass the time and cost of building capabilities from scratch.

However, the decision to expand abroad is not without its risks. Analysts caution that while some deals offer clear returns, others have led to prolonged challenges. Tata Steel’s acquisition of Corus Steel in 2007, for instance, is often cited as a cautionary tale. Mukherjea described it as an “albatross” that has burdened the company for years, highlighting the potential pitfalls of such cross-border ventures. Despite this, the trend shows no signs of slowing, with experts predicting a “deluge” of outbound deals in the coming years.

Trade Agreements and the Next Generation of Leaders

Recent trade agreements between India and the UK, Europe, and Australia are expected to further catalyze this expansion. These pacts, which aim to reduce tariffs and streamline supply chains, have created new opportunities for Indian firms to establish a stronger foothold in the West. Mukherjea believes these deals could lead to a surge in outbound investments, particularly as companies seek to build regional bases for the future. “The flow of Indian capital abroad is likely to accelerate,” he said, underscoring the importance of such partnerships.

While larger acquisitions often dominate headlines, smaller firms are also contributing to the trend. Decentralized initiatives, such as greenfield investments in the US or the pursuit of niche acquisitions, are becoming more common. Mukherjea pointed out that “dozens of smaller Indian companies” are engaging in similar strategies, indicating a broader movement beyond the top-tier conglomerates. This diversification not only strengthens India’s global presence but also allows for more targeted growth in specific industries.

Strategic Motivations and Market Realities

Analysts argue that the current wave of acquisitions is driven by a combination of strategic necessity and market pragmatism. Unlike the earlier era, where deals like Jaguar Land Rover and Corus Steel acquisitions were seen as trophy purchases, today’s focus is on securing long-term value. For example, acquiring a firm with established distribution networks or R&D expertise can significantly reduce time-to-market for Indian products. “These deals are about efficiency, not just prestige,” Singh stated, emphasizing the role of technology and innovation in shaping the new strategy.

Yet, the reliance on cash for large deals has sparked debate. The Sun Pharma acquisition, for instance, was entirely funded through cash, raising concerns about the financial risk involved. Mukherjea highlighted that even a deal of this magnitude was not executed using equity, a departure from past practices. “This suggests a shift in how companies are financing their growth,” he said, pointing to the changing dynamics of capital allocation. While some see this as a sign of financial conservatism, others view it as a necessary adaptation to a more competitive global environment.

Despite the challenges, the trend is likely to continue. As Indian companies refine their strategies and leverage international markets, the push for overseas expansion is expected to grow. This movement not only reflects the current economic climate but also signals a long-term commitment to global integration. With a new generation of corporate leaders favoring international exposure, the momentum for such acquisitions is set to persist, shaping the future of India’s business landscape in profound ways.