36 Asian Legal Business | January-February 2025 weakness, with a 29 percent decrease year-over-year to $4.3 billion, though the total PE funds raised over the past three years remained robust at approximately $23 billion. The market was dominated by several significant transactions that shaped the investment landscape. Data Infrastructure Trust led the pack with a substantial $2.17 billion investment through a single transaction spanning three firms. Kiranakart Technologies followed with multiple deals totalling $1.36 billion, while Hyundai Motor India secured $989 million in the transportation sector. Other notable investments included Manash Lifestyle at $298.3 million and Fourth Partner Energy at $274 million, demonstrating the diverse nature of investment interests across sectors. The Internet-specific sector led investments, attracting $4.49 billion across 368 deals, marking a 15.8 percent year-over-year increase. The communications sector witnessed extraordinary growth of 5,963.4 percent, securing $2.22 billion across seven deals. Healthcare demonstrated significant momentum, with medical/health investments increasing by 66.4 percent to reach $817 million across 58 deals. The biotechnology industry showed remarkable growth with a 503.7 percent increase, while the construction sector posted a 14,219.2 percent increase. However, regulatory challenges persist, notably Press Note 3, which imposes restrictions on investments from countries sharing land borders with India. “From a foreign exchange perspective, besides sectoral caps and sectoral specific conditions in some cases, I think the biggest hurdle in recent times has been the Press Note 3, which imposes restrictions on investments from countries sharing land borders with India, gate these challenges and enhance its competitive position. “Compared to other Southeast Asian destinations, Indonesia’s large consumer market, strategic location, and diverse economic sectors make it a compelling choice for PE investments in 2025 and beyond,” Pardede adds. India’s transformative moment India’s position in the Asian PE landscape has strengthened considerably, driven by initiatives like Make In India and Production Linked Incentive schemes. The country’s expanding market opportunities, cost efficiencies, and competitive advantages have caught the attention of global investors. The country’s ascent in the private equity landscape is marked by impressive numbers and transformative developments that are reshaping its investment ecosystem. The country achieved a remarkable milestone, with gross foreign direct investment (FDI) reaching $1 trillion since April 2000. Private equity investments in India surged to $15 billion in 2024, marking a 46.2 percent increase from the previous year, as shown by data analysed by LSEG Deals Intelligence. This growth was driven by sectors such as healthcare and pharmaceuticals, consumer-related industries, and technology. “India is increasingly establishing itself as a standout destination in Asia’s PE landscape,” observes Srivastava. “We are seeing global funds increasingly adopting India-specific strategies to capitalise on its long-term growth story.” India remains one of the top markets in the Asia Pacific for financial sponsor activity, accounting for at least 28 percent of the region’s total equity investments during this period, up from a 15 percent market share the previous year. However, fundraising showed some experts believe increased sanctions on China could make Indonesia more attractive as a manufacturing base – a position the Indonesian administration has been pitching aggressively to international decision-makers. Indonesia, which has a practical monopoly on nickel, aims to improve its position in the electric-vehicle value chain, transitioning from nickel exporter to global EV manufacturing hub by offering attractive tax incentives to global car manufacturers. Three carmakers— BYD, GAC Aion, and Citroen—have committed to building factories in Indonesia in 2025. They will benefit from import tax exemptions for machinery and equipment, and a reduced luxury sales tax rate of 15 percent. These incentives are designed to lower the cost of manufacturing and encourage more foreign investment in the EV sector. What makes Indonesia particularly attractive is its evolving regulatory landscape. The country has made significant strides in improving its investment climate through the Investment Law and the Omnibus Law, which have opened most business sectors to 100 percent foreign investment. The implementation of the Online Single Submission (OSS) system has further streamlined the licensing process. However, challenges remain, particularly in navigating foreign ownership restrictions in certain sectors. To address these hurdles, PE funds are adopting innovative approaches. “Firms are increasingly structuring their investments through joint ventures, convertible loan instruments, or minority investments in public company structures,” explains Pardede. Nevertheless, Indonesia’s strong economic fundamentals and proactive government policies are likely to mitiPE/VC “Compared to other Southeast Asian destinations, Indonesia’s large consumer market, strategic location, and diverse economic sectors make it a compelling choice for PE investments in 2025 and beyond.” — Daniel Pardede, HHP Law Firm
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