India continues to emerge as a standout destination for mergers and acquisitions (M&A) in 2026, offering investors a rare combination of growth potential and increasingly predictable risk dynamics. According to Vikas Pareek, Head of Transaction Solutions, India at Aon, the country’s dealmaking landscape is being shaped not by the absence of risk, but by the market’s improved ability to understand, quantify and manage it.
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 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.
Globally, however, 68 percent of investors still cite geopolitical risk as the single biggest challenge to deploying capital, underscoring the relative advantage India holds as a stable market.
However, the outlook is not without challenges. Over the next 12–24 months, India’s M&A momentum could be influenced by three key 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 we are seeing globally investors 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 dealmaking. This includes stress-testing transactions against low-probability, high-impact “black swan” scenarios such as geopolitical shocks, sudden regulatory changes or major cyber incidents.
The role of insurance in M&A transactions is expanding significantly in India. There has been a notable rise in the use of warranty & indemnity (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 United States and the Middle East remains robust, although underwriting scrutiny has become more granular. Investors are placing greater emphasis on compliance with sanctions, environmental, social and governance (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.