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India's long-term commitment to continue opening up its M&A market through a sustained programme of legal and policy reforms is helping to drive global interest from investors looking to participate in its fast growing economy.

India's M&A market comprises a mixture of joint ventures (JVs) between Indian and foreign businesses, outright acquisitions by domestic and overseas investors and a relatively smaller number of private investment in public equity (PIPE) transactions.

One of the chief attractions for overseas investors looking to acquire in India is the country's substantial consumer markets. And one of the choices facing foreign investors is to decide whether the best route to these markets is through M&A, or by building a presence in India through either a green-field or a brown-field venture.

An acquisition has the benefit of providing foreign investors with a head start in the market but opportunities to buy are limited, hence the relative abundance of foreign/domestic JVs in India.

Another reason for the popularity of JVs is that in several controlled sectors, such as telecommunications and broadcasting, 100 per cent foreign ownership of companies is not allowed.  

A crucial consideration for any company looking to invest in India is to develop a knowledge of the distinct cultural characteristics of India's business environment, such as the important role families and family ties play, for example, when negotiating with an unlisted Indian company.

Although India is taking steps to continue its liberalisation programme, there is clearly more that needs to be done. However, for investors that are willing to develop an appreciation of the country's potential and are sensitive to the cultural differences with the West, India represents a unique investment opportunity.

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