India continues to emerge as a standout destination for M&A in 2026, offering investors a rare combination of growth potential and increasingly predictable risk dynamics.
At a time when global M&A activity remains uneven, India is being priced differently compared to other emerging markets. Political continuity, regulatory consistency and a rules-based approach to foreign investment have contributed to greater investor confidence and relatively moderated risk premiums, particularly for non-tax exposures.
While geopolitical risk remains the dominant concern globally, investors see India as offering a degree of stability that allows them to price deals with greater confidence, particularly when compared with jurisdictions facing sharper political or regulatory uncertainty. Certain insurers are also of the view that India accounts for the highest proportion of warranty and indemnity (W&I) and tax-policy notifications in APAC claims data, not because of instability, but because of greater deal volumes and more rigorous post-deal scrutiny.
According to Aon Head of Transaction Solutions, India Vikas Pareek, the country’s deal making landscape is being shaped not by the absence of risk, but by the market’s improved ability to understand, quantify and manage it. Globally, however, 68% of investors still cite geopolitical risk as the single biggest challenge to deploying capital, underscoring the relative advantage India holds as a stable market.
Main risk variables that will drive momentum
However, the outlook is not without challenges. Over the next 12–24 months, India’s M&A momentum could be influenced by three main risk variables.
First, geopolitical spillover effects such as global conflicts and trade fragmentation may impact supply chains, capital flows and investor sentiment.
Second, increased regulatory and tax scrutiny is expected to elevate post-transaction risks, particularly as enforcement becomes more robust.
Third, cyber risk is no longer viewed as a technical issue but as a core valuation and operational concern, particularly in infrastructure, technology and data-driven sectors, and investors are increasingly conducting full-fledged cyber assessments for both tentative targets and portfolio entities, reflecting the shift from IT diligence to operational cyber risk assessments.
Additionally, as India’s digital economy expands, cyber risk has become central to transaction planning. Buyers are integrating comprehensive cyber due diligence early in the deal lifecycle, alongside insurance solutions designed to protect against post-closing vulnerabilities particularly as supply-chain cyber risks have surged as a key concern.
In response to these evolving risks, businesses must adopt a more forward-looking and resilient approach to deal making. This includes stress-testing transactions against low-probability, high-impact “black swan” scenarios such as geopolitical shocks, sudden regulatory changes or major cyber incidents.
Insurance role in M&A transactions expanding
The role of insurance in M&A transactions is expanding significantly in India. There has been a notable rise in the use of W&I and tax liability insurance, which are increasingly being used not only as protective tools but also as strategic enablers to unlock deals that may otherwise stall due to risk allocation challenges. This reflects a broader trend where capital deployment is being supported by large liquidity pools, globally, reinforcing deal momentum even amid uncertainty.
Inbound investment from regions such as the US and the Middle East remains robust, although underwriting scrutiny has become more granular. Investors are placing greater emphasis on compliance with sanctions, ESG standards, data protection and governance frameworks, reflecting the application of consistent global standards rather than any reduced appetite for India. This is consistent with global capital flows, where majority investors report increased cross-border investment activity in the past year, despite policy and macro uncertainties.
Higher global interest rates are also reshaping deal structures. Leveraged buyouts are now being executed with more conservative assumptions, including lower leverage and higher equity buffers. Exit timelines have lengthened, prompting greater use of alternative strategies such as continuation vehicles, minority stake sales and structured exits. Insurance-backed solutions are playing a key role in facilitating liquidity and bridging valuation gaps in this environment.
A notable shift is also underway in deal structures, with increasing preference for minority investments, joint ventures and strategic partnerships. These approaches allow investors to maintain exposure to India’s growth story while mitigating control risks and capital concentration, particularly in sectors such as infrastructure, energy transition and technology. Notably, digital infrastructure is expected to drive the highest deal flow globally, reinforcing the importance of tech-led sectors in India’s M&A pipeline.
Although the penetration of representations and warranties insurance in India remains lower than in more mature markets like the US and Europe, adoption is accelerating rapidly. India is now among the fastest-growing markets in Asia for such solutions, driven by larger deal sizes, increasing cross-border complexity and growing familiarity among market participants.
Looking ahead, insurance is set to play an even more pivotal role in India’s M&A ecosystem. From bridging valuation gaps to enabling cleaner exits and managing complex exposures, insurance solutions are increasingly being viewed as strategic tools that support deal execution and market growth especially in a global environment where risk is rising, but increasingly quantifiable and transferable.