Chennai: The ongoing West Asia conflict has become a contributing factor in stemming the growth of private equity and venture capital (PE-VC) investments in India. PE-VC investments plunged by 22% in the first quarter (Jan–March) of the current calendar year (CY2026) to $9.1 billion, compared with $11.7 billion during the corresponding quarter last year, data released by research firm Venture Intelligence on Wednesday showed. Investments also declined by 19% ($900 million) in March to $3.8 billion, compared with $4.7 billion in the same month of CY2025. The number of mega deals ($100 million and above) declined from 29 in Q1 CY2025 to 17 in the Jan–March period this year. PE-VC deals exclude those from the real estate sector.“Sectors that are affected by the non-availability of raw materials owing to the ongoing war in West Asia—from QSR restaurants (affected by LPG restrictions) to semiconductors (due to supply constraints, including helium and aluminium)—can be expected to adopt a wait-and-watch approach from investors,” Arun Natarajan, founder, Venture Intelligence, told TOI.Shishir Vayttaden, partner at Khaitan & Co, said, “In the listed space, for example, investors typically prefer to see where stock prices settle before committing to off-market valuations. In the unlisted space, businesses facing immediate supply chain disruptions may prioritise stability over capital raising. Additionally, currency depreciation tends to slow down deal activity more broadly.” Navin Honagudi, managing partner at Elev8 Venture Partners, said that while geopolitical uncertainties may delay some investment decisions in the near term, activity is expected to pick up in the second half of the year as visibility improves and interest rate cycles stabilise. “From a medium-term perspective, sectors like financial services, fintech, and domestic consumption will continue to attract strong PE-VC interest, driven by structural growth tailwinds,” he said.
