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India's share of global GDP is projected to rise from 3.7 per cent in 2025 to 7.0 per cent by 2050. This shift marks the country's increasing significance as a destination for alternatives investors seeking diversified long-term growth, according to a report by McKinsey & Company. The report stated that India's private markets, which attracted just USD 6.4 billion in 2006, are today central to the nation's economic trajectory.
"The private alternatives market is increasingly important to India's economic growth....its attractiveness as a destination for alternatives investors seeking diversified long-term growth may further increase; India's share of global GDP is projected to rise from 3.7 percent in 2025 to 7.0 percent by 2050," the report noted. Private-capital deployment across various asset classes reached USD 44 billion in 2025, with its share relative to the country's GDP more than doubling to 1.42 per cent in the past decade, compared with 0.68 per cent from 2006 to 2015. "India has also emerged as a relative outperformer in Asia-Pacific's contracting private-markets landscape". While regional deployment faced a slowdown, India's share of Asia-Pacific private equity and venture capital deployment increased from around 12 per cent between 2015 and 2019 to about 21 per cent from 2020 to 2024. The report noted that Limited Partners (LP) are increasingly prioritizing India, which now accounts for more than a third of all Asia-Pacific investment exposure among surveyed investors. Europe-based investors show the highest exposure at around 60 per cent, while those based in the Middle East, Asia-Pacific, and North America maintain exposure levels between 20 and 30 per cent of their total regional capital. "India was the most attractive private market destination in Asia-Pacific, with 31 percent ranking it first and 76 percent placing it within their top three choices," the report highlighted. Within Asia-Pacific, the joint share of investment for India and Japan increases to 34 per cent for the 2020-2024 period, rising from 19 per cent between 2015 and 2019. Conversely, China's share declined to 37 per cent from 55 per cent during the same timeframe. While India remains a top choice overall, Japan is preferred by LPs with more than USD 25 billion in assets under management. Meanwhile, the ranking for China remains polarized; 17 per cent of respondents rank it first, but 66 per cent place it fifth or sixth relative to other Asia-Pacific markets. The report indicated that private-capital deployment in India has "plateaued since its peak of USD 74 billion in 2021". However, the country continues to attract interest as investors seek diversification. Total deployment across Asia-Pacific reached USD 1,008 billion between 2020 and 2024, with India's role expanding as other major markets in the region experienced a contraction in their relative shares. (ANI)
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