Focus on India: M&A as a Growth Engine

India is increasingly crystallizing as an important economic nation. Not only the investment in India is gaining in importance, but also the interest of Indian investors in Europe is growing. Especially in the current geopolitical situation, the importance of this interdependence will increase.

While the German export model has occasionally come under pressure, German exports to India were able to increase by EUR 5 billion in the last five years. Overall, German companies exported USD 18.3 billion worth of goods to India in 2024 - 2.6 percent more than in the previous year and a new record. The total value of German imports from India was USD 15.1 billion in 2024. India's growing role as a procurement market for electronics is striking. German imports amounted to approximately USD 1.1 billion (plus 62 percent). According to the German Federal Statistical Office, the bilateral trade in goods between the Federal Republic of Germany and India reached an overall new all-time high in 2024. 

India is pursuing ambitious economic goals. The vision of expanding its own economy to a volume of 30 trillion US dollars is ambitious, but by no means utopian. A growing domestic market, favourable demographic developments and a progressive economic liberalisation make the country an attractive target for investments. Already today, India is the world's fifth-largest economy and a key player in world trade and in global supply chains. With the exception of the coronavirus crisis year 2020, the country has recorded stable economic growth for many years.

Diljinder Singh and Markus Linnartz had the opportunity to attend the conference of the International Bar Association (IBA) in Mumbai from 3 April to 4 April 2025. Under the title "Mergers and Acquisitions in India: A Key Engine to the USD 30 Trillion Goal" more than 230 lawyers and business representatives from more than 20 countries met together - an impressive sign for the growing international importance of the Indian market.

As the M&A activities in India in the financial year 2024-25 amount to almost USD 100 billion due to private equity and structural reforms, the role of M&A as an expansion tool for India's growth trajectory was highlighted at the conference. The IBA Conference was fully booked and offered a variety of exciting insights and perspectives. The increasing importance of financial investors positioning themselves as strategic buyers in India was discussed. The impact of geopolitical developments on international transactions were also intensively discussed. At the same time, it was clear how much technological innovations were now shaping M&A processes and how corporate governance standards for listed companies in the Indian market were evolving.

A panel discussion on private equity and financial investors was of particular practical relevance. The development of transaction structures and strategies as well as current trends were debated. This showed that the Indian market continues to struggle with uncertainties despite progressive legal frameworks such as the Insolvency and Bankruptcy Code (IBC) - among other things, with regard to deadlines, access to information and evaluation criteria. This makes it even more important for activities to be professionally supported by consultants who know the market, the business and the right contacts.

A particularly interesting aspect for international investors was the discussion about the so-called "clean slate" principle. It is intended to ensure that buyers are not liable for the insolvent company's inherited liabilities in the event of a takeover. However, there is still uncertainty, especially when it comes to tax liabilities: is it really guaranteed that any tax debts will be completely waived? This is a crucial point for investors - for, unanswered questions about tax treatment can have a significant impact on the risk assessment and transaction structure in the case of takeovers.

Conclusion and Outlook

Participation in the conference was extremely enriching, instructive and impressively demonstrated: India is not only one of the most exciting growth markets worldwide, but also an increasingly regulated and professional environment for international M&A transactions.  It is still important to always consider economic opportunities in conjunction with the legal and tax framework.

We look forward to contributing our expertise to the India panel at the IHK-Außenwirtschaftstag NRW in June 2025 and to supporting the economy in NRW on its way to India and its organisation.

ADVANT Beiten provides legal and tax advice to medium-sized companies and has been supporting cross-border investments and M&A projects for many years. In recent years, India has played an increasingly important role here - for internationally operating companies or those who would like to become one.

Autor: Markus P. Linnartz
Beteiligter Experte: Diljinder Singh Walia