In late April, India’s Sun Pharmaceuticals announced an $11.75 billion acquisition of Organon & Co., a New York-listed firm specializing in women’s health and biosimilars. This landmark deal, the largest overseas acquisition by an Indian company in nearly two decades, follows a series of significant international purchases by Indian conglomerates. These include Tata Motors’ $4.4 billion takeover of Iveco, Coforge’s $2.35 billion acquisition of AI firm Encora, and the Bajaj Group’s 23% stake purchase in Allianz SE. Data from Grant Thornton reveals that Indian companies invested over $18 billion in outbound acquisitions in 2025, a 34% increase from the previous year, with deal values potentially exceeding $15 billion in the first half of 2025 alone, according to Sumeet Abrol, partner at Grant Thornton.
Shifting Motivations for Global Expansion
While this wave of international acquisitions by Indian firms may recall the ambitious global buying spree of companies like the Tata Group two decades ago, analysts suggest the underlying motivations have evolved. Today, Indian companies are increasingly acquiring Western assets for strategic and operational advantages rather than solely as symbols of global prestige.
Domestic Economic Headwinds Drive Outbound Investment
The current economic climate in India contrasts sharply with the booming market of the early 2000s. India is currently experiencing a significant outflow of foreign portfolio investors, a slowdown in net foreign direct investment (FDI), and sluggish private sector investment, despite government incentives like tax cuts and production-linked subsidies.
India’s Chief Economic Advisor, V. Anantha Nageswaran, recently noted that despite strong corporate profit growth post-Covid, overall private sector capital formation rates have been disappointing. This economic backdrop, coupled with a perception of a challenging domestic business environment, is pushing Indian companies to seek growth and diversification opportunities abroad.
Strategic Advantages Abroad
Experts highlight that companies are looking overseas to gain access to markets, established brands, advanced technology capabilities, research and development expertise, and distribution networks that would be time-consuming to build organically. Saurabh Mukherjea of Marcellus Investment Managers points out that many Indian companies are establishing greenfield factories in countries like the US, where industrial land is more accessible and working capital is easier to secure.
This trend is not limited to large corporations. While high-profile deals like Sun Pharma’s acquisition and Mukesh Ambani’s reported backing of a major oil refinery project in the US gain attention, numerous smaller Indian companies are also pursuing similar greenfield investments or smaller acquisitions. Neha Singh, co-founder of Tracxn, attributes this surge to stronger balance sheets and improved access to global financing for Indian firms.
Supply Chain Resilience and Risk Mitigation
In an era of increasing geopolitical tensions, supply chain disruptions, and the weaponization of trade tariffs, overseas acquisitions are also seen as a strategic move to enhance supply chain resilience. Companies are looking to secure their operations and mitigate risks associated with global trade volatility.
Challenges and Future Outlook
Despite the strategic benefits, overseas acquisitions carry inherent risks. The historical acquisition of Corus Steel by Tata Steel, for instance, proved to be a long-term challenge for the company. Furthermore, the reliance on all-cash deals, as seen in the Sun Pharma acquisition, can pose financial risks, as companies are still largely unable to finance these large transactions with shares.
However, the trend of outbound investment is likely to continue, potentially accelerated by a series of free trade agreements between India and countries like the UK, Europe, and Australia. Many next-generation business leaders, often educated and living abroad, may also prefer holding assets in foreign currencies, especially given the historical depreciation of the rupee against the dollar.
While the total value of outbound deals might be influenced by the current
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