Indian companies spent $8.8 billion on international acquisitions in the first seven months of 2026, a 76% increase. As domestic deal activity slows, businesses are targeting foreign firms to gain AI capabilities and new markets. Investors have reacted positively, with acquirers seeing an average 30-day stock return of 3.7%.
Indian companies are shifting their focus away from the domestic market to buy businesses overseas. In the first seven months of 2026, Indian firms spent $8.8 billion on international acquisitions, a jump of 76% compared to the previous year. While domestic deal activity decreased by 14% to $10.1 billion, this rise in foreign spending shows a clear strategy to gain scale and technical skills outside India. The trend is notable as it happens while foreign investment into India has also slowed down.
The main reason for this change is the need for specialized technology, especially in artificial intelligence. Instead of building these complex systems from the ground up, companies like Infosys and Coforge are choosing to buy foreign businesses that already have the required technology and market presence. This allows them to quickly add new capabilities and reach global customers, which can be faster and sometimes more effective than starting a new project internally.
Investors have generally welcomed this strategy. Companies that announced these international deals in 2026 saw an average stock price increase of 3.7% over the next 30 days. This is a positive change from 2024 and 2025, when the market often reacted poorly to large acquisitions. It shows that shareholders are now more confident in the ability of management teams to pick the right companies to buy, rather than just pursuing growth for the sake of size.
However, investors should be aware of the risks involved in buying companies overseas. Large acquisitions often come with high price tags, which can put pressure on a company’s cash reserves or require taking on more debt. There is also the challenge of integrating a foreign business into the main company’s culture and operations. If a company overpays for an acquisition or fails to manage the new business well, it can hurt profit margins and weaken the financial health of the company.
Furthermore, global economic factors like currency fluctuations can impact the value of these deals. Since these transactions happen in foreign currency, any sharp change in exchange rates could affect the final cost or the expected financial benefit. The focus on fewer, but larger, high-stakes transactions also means that any error in selecting a target company could have a significant negative impact on the bottom line.
Moving forward, the success of this trend will depend on how well these companies manage their new foreign assets. Investors should look for updates on how well the new businesses are integrated, whether the expected revenue starts to arrive, and if the company’s debt levels remain under control. Monitoring these factors will help determine if this wave of global expansion will truly lead to long-term growth or if it will strain company resources.