US tariffs hammer India’s deal flow amidst investor caution: KPMG

Global PE investment near four-year peak by Q3’25: KPMG

The impact of ‘punitive’ tariffs imposed by United States President Donald Trump on Indian exports to the US have impacted not only Indian trade volumes, but also slowed down deal activity, as a report by KPMG highlights. Global PE investment hit USD 1.5 trillion by Q3’25, says the report.

Global private equity (PE) investment reached USD 1.5 trillion by the end of the third quarter of 2025, placing the year on track to achieve a four-year high if momentum continues through the final quarter.

However, the deal activity in India has slowed down in direct response to the uncertainties created by the tariffs imposed by United States President Donald Trump on Indian exports to the US as investors have turned cautious.

In a press statement, KPMG says that according to its Q3’25 Pulse of Private Equity, the value of global PE investment during the quarter stood at USD 537.1 billion, compared with USD 512 billion in the third quarter of 2024.

“AI is incredibly hot right now, and PE investors across regions are looking for ways to get in on the action. We are seeing a lot of interest in everything to do with AI infrastructure, including data centres and the energy generation that will be required to support AI in the future. It is a really exciting area, and one that is only likely to grow over the foreseeable future,” says Gavin Geminder, Global Head of Private Equity, KPMG International.

According to the report, in India, private equity investment moderated in 2025 but maintained significant strategic interest from global investors. As of Q3’25, investment stood at USD 14.9 billion across 217 deals, a drop of over 43 pc as compared to USD 26.3 billion across 289 deals in 2024. The slowdown has been linked to geopolitical and trade-related uncertainties, particularly concerning US tariff measures.

Also Read: Indian MSMEs in cross-hair of US tariffs

India’s private equity landscape continues to evolve, with firms adopting platform and consolidation strategies in technology, healthcare, and manufacturing segments. The financial services and life sciences sectors also attracted continued capital, supported by expanded fund sizes and greater participation from global investors.

“People today talk about the AI revolution. The biggest revolution that is happening for me sitting here in India is the private equity in India revolution. India has incredibly strong macros, a growing population, the largest working age population in the world, and some of the highest savings rates in the world. All of this makes India a very attractive domestic consumer story. That is a big draw for PE investors, along with the significant amount of opportunity there is for PE players to come in, invest money, and make money by building up India-based businesses,” says Nitish Poddar, Head of Private Equity, KPMG in India.

Globally, KPMG says that the increase occurred despite a decline in total deal volume, which dropped from 5,032 in Q3’24 to 4,062 in Q3’25, reflecting a shift toward larger individual transactions.

PE investment in the Americas remained stable, totalling USD 322.9 billion in Q3’25, up from USD 306.1 billion in the same period last year.

It adds that the United States accounted for USD 300.2 billion of this activity, showing continued capital deployment in mid-market and large-scale deals.

Also Read : Indian MSMEs grapple with US tariff fallout

Investment in Europe, the Middle East, and Africa (EMA) recorded USD 178.3 billion, an increase from USD 145.4 billion during Q3’24, while activity in Asia declined to USD 30.6 billion from USD 42.9 billion a year earlier.

KPMG says that the value of cross-border private equity transactions reached USD 750 billion at the end of Q3’25, indicating sustained international deal participation, though still short of the USD 1.1 trillion peak recorded in 2021.

Meanwhile, global PE exit value stood at USD 832 billion, suggesting 2025 is on pace to register the second-highest annual exit total in a decade after 2021.