India’s ascent to emerging global leadership is fueled by a dual strategy: establishing worldwide superiority in digital public infrastructure and executing deep structural reforms in its industrial and financial sectors. This combination is systematically formalizing the economy, increasing productivity, and creating a uniquely attractive environment for capital.
The Digital Engine: Formalization and Productivity
India’s success with its digital public infrastructure (DPI) has shifted its digital economy from a mere enabler to a primary driver of national income and efficiency.
Disruptive Economic Scale: The digital economy is on track to contribute close to one-fifth of national income by 2029–30, growing nearly twice as fast as the overall economy. This means its share will exceed that of both the agricultural and manufacturing sectors.
Efficiency Gains: The digital sector stands out as being five times more productive than the rest of the economy. This hyper-productivity is driven by the rapid expansion of digital platforms and intermediaries, projected to grow at around 30% annually.
Global Payment Leadership: The scale of digital financial formalization is globally unmatched: India accounted for 48% of all digital payments in the world in 2023, surpassing the combined transaction volume of the next four leading countries. Platforms like UPI are accelerating formalization for low-income segments, with transactions having crossed 11 billion per month in 2024.
Talent and Tech Hub: India’s role as a major technology hub is underscored by it hosting 55% of the world’s Global Capability Centers (GCCs), further deepening its expertise in AI and cloud services.
Structural Reform: Industry and Capital Maturity
Complementing digital success, large-scale, policy-driven reforms are enhancing economic resilience and providing robust avenues for capital exit.
Industrial Reimagining: Initiatives like the Production Linked Incentive (PLI) Scheme have driven significant realized investments, totalling approximately ₹1.76 lakh crore (US$ 21.3 Billion) by March 2025. This has fundamentally reshaped sectors, most notably driving electronics production up 146% from FY21 to FY25.
Fiscal Commitment: The government supports this structural shift with consistent fiscal backing, evidenced by the capital outlay (CAPEX) reaching 3.4% of GDP (US$ 133 Billion) in FY 2024–25.
Maturing Capital Markets: The success of these reforms has culminated in a highly active IPO market. Total IPO fundraising from 2020 to 2025 reached ₹5.39 lakh crore, surpassing the total amount raised over the previous two decades (2000–2020).
PE/VC Liquidity: The exit environment for private capital is robust. The average Offer for Sale (OFS) component of IPOs, which allows early investors to sell stakes, has increased to over 50% in 2025. Furthermore, the financial sector led PE/VC exits in 2025, accounting for 28% of total divestments, confirming the depth and quality of the market.
For Family Offices and Limited Partners, India represents a unique decoupling opportunity. The successful convergence of structural reforms (PLI, tax policy) with a globally dominant digital public infrastructure (UPI, Aadhaar) has systematically de-risked and formalized the core economy. The market’s increasing maturity, evidenced by the soaring volume of PE-backed IPO exits, offers a proven path to liquidity and superior returns. We believe that LPs and Family Offices should view this environment not as a cyclical emerging market bet, but as a mandatory, long-term strategic allocation designed to capture one of the world’s most compelling and structurally driven disruptive growth narratives.
Aceana Group
Insights
