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Investment Activity Slows in First Half of 2025, Cautious Optimism for Second Half
29 Jul
Summary
- Dealmaking down in Jan-Jun 2025 vs year-ago period and H2 2024
- Positive signals like strong GST, RBI rate cut, IPO pipeline
- Concerns on earnings growth and India-US FTA discussions
- Experts predict higher investment in H2 2025 on better earnings, India-US FTA
According to a recent report, the number of deals in India declined in the first half of 2025 compared to the same period in the previous year and the second half of 2024. The consultancy firm's partner, Vivek Soni, noted that while early signals such as strong GST collections, a recent rate cut by the Reserve Bank of India, and a robust IPO pipeline are encouraging, the overall outlook remains cautiously optimistic.
Soni cited concerns over earnings growth and the ongoing discussions around the India-US free trade agreement (FTA) as factors stretching the timelines. However, he opined that the second half of 2025 could see higher investment activity as companies' earnings performance improves and the India-US FTA is finalized.
The report suggests that the investment landscape in India is navigating a period of uncertainty, with dealmaking activity slowing down in the first six months of 2025. Nevertheless, experts remain cautiously optimistic about the potential for a rebound in the latter half of the year, provided that the economic and policy environment continues to improve.
