Indian Private Equity: Taxation and Trends

July 01, 2015

With a new government at India’s center and positive macroeconomic fundamentals working in its favor, the private equity industry is expected to invest more actively into India over the short to medium term. Key issues and challenges affecting Indian private equity stem from tax and regulatory bottlenecks, a mismatch in valuation expectations and a tough, competitive environment for good-quality deals. India is also experiencing a significant exit overhang, and the pressure to exit is expected to rise. Macroeconomic conditions, exit environment and investor sentiment remain the top three growth influencers affecting Indian private equity in 2015. This article presents an overview of some of the key reforms introduced by the Indian Finance Act, 2015, the first, complete fiscal bill of the Narendra Modi government, as pertinent to GPs and LPs in Indian private equity funds.

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