India's M&A deal volumes fall 20% in 2026, but bigger bets and outbound acquisitions gain ground: BCG

India’s Mergers and Acquisitions (M&A) market has entered a more selective phase in 2026, with companies pursuing fewer transactions but placing greater emphasis on scale, capabilities and international expansion, according to a report by Boston Consulting Group (BCG).

M&A volumes declined by roughly 20% year-on-year during the first seven months of 2026, slightly ahead of the 18% fall recorded globally, while overall deal value remained broadly steady.

The shift towards larger, higher-conviction transactions has also been reflected in investor response. Deals announced during the period generated a median 30-day relative shareholder return of 3.7%, compared with -0.4% in 2024 and -2.7% in 2025, indicating a markedly more positive market reaction to M&A announcements this year.

Large deals hold up as smaller transactions decline

The contraction has been concentrated largely among smaller transactions, with deals valued at less than $1 million accounting for nearly half of the overall decline in volumes. In contrast, transactions above $100 million remained relatively resilient, with 45 such deals recorded in the first seven months of 2026, compared with 51 in the same period in 2025 and 37 in 2024.

Deals exceeding $500 million accounted for nearly 59% of total transaction value. The share contributed by transactions above $1 billion was around 14-15 percentage points higher than in 2025, based on deals for which values were disclosed. BCG said buyers are increasingly seeking scaled platforms and established capabilities rather than pursuing smaller tactical acquisitions.

“Volumes have fallen while the market is rewarding those that still transact with conviction,” said Kanchan Samtani, APAC Leader, Corporate Finance & Strategy, MD and Senior Partner, BCG. She said companies should keep their M&A engines active rather than wait for sentiment to improve.

Outbound M&A emerges as a key growth driver

International expansion has become another defining feature of India’s M&A market. Outbound deal value increased by nearly $3.8 billion, even as domestic deal value fell by $1.6 billion and inbound deal value declined by $3.7 billion. BCG attributed the trend to globalising supply chains, expanding international order books and the pursuit of capabilities unavailable or less developed in India.

“The Indian outbound story isn’t just the large conglomerates anymore,” said Dhruv Shah, Managing Director and Partner, BCG, adding that mid-sized companies are also acquiring capabilities and market access overseas.

The report also points to a slowdown in software and SaaS deal activity, increased interest in domestic semiconductor companies, rising deal volumes in beauty and personal care, and a cyclical shift in infrastructure-led sectors.