Private Equity In India: The Risk, Structure And Reward

With India's economy showing real GDP growth of 8.7% annually since 2003, international investments into India have increased significantly. Even as market conditions have limited private equity transactions in the United States and, to a certain extent, Europe, private equity investment in India totaled more than $10 billion for all of 2007. According to the Handbook of Statistics on the Indian Economy published by the Reserve Bank of India ("RBI"), overall foreign direct investment ("FDI") into India was almost US$20 billion for the 2006-07 fiscal year, more than double the 2006 figure of US$7.7 billion. And for 2007-08, some experts expect FDI to exceed US$30 billion. At this pace, FDI into India is likely to exceed that into China in the next two to three years, and rank India as the most favored emerging market for foreign investment.