Estimated reading time: 13 minutes

Indian Business Trends Shaping Cross-Border Deals in 2025 (Tech, Rules, and Market Shifts)

India is quickly becoming a major force in global business, with cross-border deals at a three-year high in 2025. In the first quarter alone, 669 mergers and acquisitions worth $29 billion were recorded, showing strong investor confidence and growing market opportunities. This surge reflects not only India’s expanding domestic market but also its evolving regulatory landscape and strategic focus on sectors like energy, technology, and financial services.

Understanding these shifts is vital for anyone invested in international business or looking to enter Indian markets. Whether it’s new government policies easing foreign investment or the rise in outbound investments through hubs like GIFT City, Indian companies are reshaping the way cross-border deals happen. This post breaks down the key trends shaping these deals today, giving you the insight needed to make informed decisions and spot emerging opportunities.

youtube video reference for further insights

Tech Innovation Driving Cross-Border Growth

India’s tech sector is rapidly fueling the country’s footprint on the global stage, especially through cross-border deals. Every year, more Indian startups and established firms are not only attracting investments from global investors but are also expanding their operations beyond Indian borders. This growth is powered by vibrant innovation in key tech sectors like fintech, SaaS, and AI, where Indian companies are pushing boundaries and attracting the world’s attention. Let’s break down how this momentum is shaping cross-border deals.

The Role of Indian Startups in Global Expansion

Indian startups are no longer just local players. Many are raising significant rounds of international funding and targeting global markets as part of their growth strategy. The fintech sector, in particular, stands out, driven by innovations in digital payments, lending, and insurance. Startups like Razorpay and PhonePe have become household names and are raising hundreds of millions in overseas investments to expand their reach.

What makes these startups attractive to global partners?

• Massive domestic market & scalability: Solutions refined in India’s diverse and large market can be adapted for other emerging markets.
• Cutting-edge payment infrastructure: India’s Unified Payments Interface (UPI) is a model for digital transactions, helping startups develop fintech solutions that appeal globally.
• Strong SaaS and AI foothold: With over 70% of Indian SaaS revenue coming from international customers, companies have proven their global appeal.

Cross-border investments are not just about capital but also partnerships that help Indian startups scale faster. Whether it’s expanding operations in the US, Middle East, or Europe, Indian startups are turning overseas opportunities into real business wins. For example, fintech startups like ClearTax and Pine Labs have moved aggressively into Southeast Asia and the US to tap growing demand.

The ongoing collaboration between Indian startups and global venture capital shows no signs of slowing down. A recent $1 billion alliance formed between top U.S. and Indian VC firms highlights just how confident investors are in Indian startups, especially those involved in deep tech sectors like AI and cloud computing. This alliance will pump capital into startups incorporated in India, supporting cross-border innovation without forcing founders to move abroad.

You can check out the top Indian fintech startups to watch in 2025 for examples of innovative companies attracting global interest.

Collaborations in Emerging Technologies

These days, the story isn’t just about startups expanding abroad but also about Indian companies teaming up with international firms on emerging technologies. Artificial intelligence, blockchain, and cloud computing are key areas where partnerships are flourishing.

Why are Indian firms so sought after globally?

• Exceptional tech talent: India produces a large pool of highly skilled engineers and researchers with expertise in AI, machine learning, blockchain, and cloud platforms.
• Cost-effective innovation: Indian teams balance quality with cost efficiency, making partnerships practical and productive.
• Government push: Initiatives fostering innovation and research grants encourage firms to tackle advanced tech projects.

Look at how Indian firms are increasingly involved in AI collaborations, such as developing AI-powered tools for cross-border payments or enhancing cloud-based enterprise SaaS solutions for multinational companies. Indian startups are not just service providers but co-creators in joint ventures, often embedding their technology into global supply chains and digital infrastructures.

For instance, Indian AI startups like Haptik and Niramai are working with foreign counterparts to expand the reach of conversational AI and health tech globally. Such ventures bring together international market knowledge with Indian talent pools to accelerate product innovation.

The recent U.S.-Indian $1 billion deep tech alliance aims to fuel startups focused on foundational technologies like AI, semiconductors, quantum computing, and robotics. This cementing of ties is more than funding; it’s about building ecosystems that enhance the innovation power on both sides of the world.

If you want an in-depth look at India’s AI startup scene and how it’s revolutionizing industries, take a look at this resource on AI startups in India.

Photo generated by AI

These collaborations signal a clear shift — India is no longer just a talent hub or a service destination but a key partner driving innovation on par with global leaders. With stronger cross-border tech partnerships, Indian businesses are charting new paths for growth, investment, and influence in the global economy.

Regulatory Changes Encouraging Cross-Border Deals

India’s evolving regulatory framework is making it simpler and more attractive for international companies to invest, collaborate, and enter partnerships with Indian businesses. Recent changes, especially in foreign direct investment (FDI) policies and business environment reforms, are encouraging a surge in cross-border deals. Governments at both the central and state levels have focused on easing entry barriers, refining compliance processes, and opening up strategic sectors for global investors, which is reshaping how cross-border deals happen today.

Liberalization of FDI Policies

India has relaxed foreign investment rules in several key sectors, sparking new excitement among international investors and partners. The government has gradually increased limits on foreign ownership and allowed automatic routes (where less government approval is needed), enabling faster deal-making and smoother collaborations.

Some of the sectors benefiting the most from these relaxations include:

• Retail: Foreign investors can now hold up to 100% in single-brand retail ventures without prior approval, encouraging international brands to enter Indian markets directly.
• Manufacturing: Liberal FDI norms have attracted global manufacturers looking to diversify supply chains and tap into India’s growing demand.
• Defense: The government raised the FDI ceiling to 74% through the automatic route (and up to 100% with government approval), encouraging foreign firms to partner with Indian companies in defense manufacturing and technology transfers. This backdrop has triggered more mergers, joint ventures, and investments in this capital-intensive sector.

These changes send a clear message: India is open for business and ready to team up with the world’s top players. Foreign investors also benefit from streamlined processes that reduce wait times and red tape, making capital inflows and partnerships more fluid than ever.

For more insights into the evolving FDI scene, visit the Foreign Direct Investment in India | FDI Trends & Insights.

Ease of Doing Business Initiatives

Beyond just opening sectors for investment, India is aggressively improving the overall business climate. These reforms target cumbersome licensing, slow registrations, and complex compliance procedures—issues that have traditionally slowed cross-border activity.

Key government efforts include:

• National Single Window System (NSWS): This digital platform acts as a one-stop shop for investors and businesses to identify and apply for necessary approvals. It cuts down the confusion around multiple clearances and simplifies the process with real-time status updates.
• Faster Business Registrations: States and central agencies have shortened timelines for company formation, licensing, and permits. Some have introduced online portals, reducing the need for physical visits and paperwork.
• Business Reforms Action Plan (BRAP): Through this initiative, India tracks and ranks states based on their ease of doing business performance. The constant pressure to improve has led to more investor-friendly policies nationwide.
• Reduced Red Tape: Efforts to eliminate outdated permit requirements and consolidate filings into fewer submissions have reduced bureaucratic delays.

All these moves add up to a smoother, more predictable environment for cross-border deals. Foreign investors feel confident that they can navigate Indian regulations more easily with less risk of delays or sudden changes. Plus, this streamlining encourages quicker deal closure and faster business scaling.

Learn more about the NSWS and how it supports simpler entry at NSWS: India’s National Single Window System.

Image generated by AI

Taken together, these regulatory reforms are more than just policy updates. They represent a real push to connect Indian markets with the world in a way that encourages partnerships, speeds up investments, and sparks innovation across sectors. This provides a clear foundation for more and bigger cross-border deals in the years ahead.

Rising Role of Sustainability and ESG in Deal-Making

Sustainability and environmental, social, and governance (ESG) considerations are no longer just buzzwords in business—they play a major role in shaping cross-border deals, especially for Indian companies. Global investors and partners increasingly expect Indian businesses to meet strict ESG standards before entering into deals. This shift aligns with India’s growing commitment to sustainable development and the rapid growth of green finance options. Companies actively integrating ESG into their operations are standing out in deal negotiations. Here’s how Indian businesses are securing green investments and forming partnerships that reflect these values.

Green Investments and Partnerships

Indian firms are securing substantial green funding and partnering with international players in renewable energy, clean technologies, and sustainable business models. These deals not only provide capital but also access to global expertise and technology that accelerate clean growth.

Some notable examples include:

• Renewable Energy Expansion: REC Limited, a Maharatna public sector enterprise, successfully issued green bonds worth $500 million in 2024 to finance large-scale solar and wind projects. This helped REC strengthen its cross-border funding base to boost India’s renewable capacity.
• Corporate ESG Bond Issuances: Larsen & Toubro (L&T) issued India’s first ESG bond under the new SEBI framework, raising significant capital for sustainability projects. This marked a milestone in attracting global green finance aligned with India’s evolving regulations.
• International Clean Tech Collaborations: Indian clean energy startups and companies are actively partnering with US and European firms for technology sharing and joint ventures. These include solar panel manufacturing, battery storage, and hydrogen fuel initiatives that have high ESG appeal globally.
• Sustainable Infrastructure Projects: Indian businesses are working with development banks and foreign investors to fund infrastructure projects that minimize environmental impact and promote social responsibility, such as eco-friendly urban transport and water management systems.

These investments illustrate India’s ambition to bridge its sustainable finance gap and match global expectations. They show how Indian firms are positioning themselves as responsible partners who can deliver value beyond profits. The rise in green finance means more cross-border deals now hinge on how well companies can demonstrate ESG leadership.

For a closer look at how India is fueling its green future through sustainable finance, you can read this detailed piece on the pivotal role of sustainable finance in India.

Indian businesses take the lead in green investments and international partnerships for a sustainable future. Image generated by AI.

Consumer Market Evolution and Its Global Impact

India’s consumer market is one of the fastest-growing and most dynamic in the world. The rapid urbanization coupled with a swelling middle class is reshaping how products and services are consumed. This transformation has caught the eye of global businesses eager to tap into this expanding market. The country’s unique blend of tradition and modernity means consumers are becoming more discerning and open to new experiences while still valuing localized offerings that resonate with their everyday lives.

Global brands and international firms are responding by tailoring their approaches—blending innovation with localization. This shift is not just about selling products but about creating meaningful collaborations with Indian companies. These partnerships help foreign players navigate cultural nuances, distribution channels, and customer expectations. It’s a two-way street where cross-border deals grow out of the need to serve India’s evolving market with agility and respect for local preferences.

Changing Preferences Fuel Cross-Border Collaborations

India’s consumers today show diverse tastes shaped by rising incomes, urban lifestyles, and tech-driven shopping habits. They expect quality, variety, and convenience, whether shopping online or in brick-and-mortar stores. This has opened doors for global brands to customize their products or form joint ventures with Indian firms.

Some key trends driving this include:

• Urbanization and Lifestyle Changes: Cities are expanding, and with that comes demand for modern products in categories like fashion, personal care, and home appliances. Brands are adapting sizes, flavors, and packaging to suit Indian tastes.
• Growing Middle Class: An increasing number of consumers aspire to upgrade their consumption choices. This influences demand for premium brands as well as affordable innovations. Global companies often pair their premium offerings with value lines to cover this wide spectrum.
• E-commerce Boom: Digital adoption is exploding. India’s e-commerce market is expected to reach around $200 billion by 2026¹. The online shopper base is now the second largest in the world². This presents huge opportunities for global brands to go direct to consumers or partner with local marketplaces.
• Food and Beverage Preferences: Indian tastes vary widely regionally, yet global food brands have successfully entered by localizing recipes and ingredients. Collaborations often involve Indian firms to capture this diversity efficiently.

For example, many international retailers and food companies are entering India through joint ventures or franchise models rather than a direct approach. This allows them to blend their global expertise with a deep understanding of the Indian consumer mindset. Companies also adapt marketing to focus on festivals, regional language ads, and local social trends.

The growing presence of global brands collaborating with Indian companies reflects this trend. Whether it’s clothes, electronics, or snacks, these partnerships ensure that what’s offered matches evolving preferences on the ground.

Looking at the bigger picture, India’s growing urban middle class acts like a magnet pulling in global capital, technology, and innovation. For investors and dealmakers, understanding these localized consumer dynamics is essential to crafting successful cross-border partnerships.

You can explore more about how India’s online shopping landscape is developing in the Bain report on How India Shops Online 2025 and its expected rise in e-commerce market size, which hits close to $200 billion in the next few years³.

Conclusion

Tech innovation, regulatory reforms, growing focus on sustainability, and changing consumer habits are key forces shaping India’s cross-border deals. These factors create new opportunities and boost confidence for investors and global businesses.

Keeping up with these trends is essential for anyone looking to partner with or invest in Indian companies today. As India opens doors wider and its market matures, deals will become more dynamic, diverse, and focused on long-term value.

Staying informed and adaptable will help you spot where India fits in your global strategy and benefit from the ongoing shifts in business and investment flows. Your next opportunity could be closer than you think.