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This year’s M&A value of Indian businesses acquiring competitors in Europe.

Europe's defence sector, long a secondary concern, has gained sudden prominence as geopolitical tensions reshape strategic priorities. Both France and Germany are now actively seeking new defence partnerships and have turned their attention East, strengthening ties with India in a bid to diversify their alliances and bolster technological capacity.

Defence collaborations are inherently strategic and politically sensitive. Companies across Europe are increasingly seeking partnerships to accelerate technological development and expand manufacturing capabilities. Both France and Germany agreed with India on substantial new collaborations just last week:

These government-level agreements typically pave the way for commercial partnerships. Indeed, several commercial collaborations have already been announced or are under active consideration:

India's defence landscape has historically been anchored by partnerships with Russia, alongside an established domestic development and manufacturing base. Notably, broader Indian partnerships are themselves evolving and Brazilian Embraer Group recently signed a strategic cooperation agreement with India's Mahindra Group. Geopolitical developments appear to be reshaping defence relationships globally, creating clear potential for stronger Indo-European ties based on shared values and the strategic imperative to diversify supplier networks and reduce dependency.

This falls somewhat outside my usual focus, but these developments seemed important to flag given the scale and visibility of recent Indo-European defence cooperation.

Sources: Construction World India, Manufacturing Today, New Indian Express, The Economic Times

Volkswagen (VW) is Europe's largest carmaker and one of the biggest globally by volume. Yet after more than 20 years in India, the world's third-largest automotive market, VW Group has managed to secure only 2% market share and is now evaluating options to reduce domestic investments, a telling sign of strategic failure in a market where presence alone hasn't translated to competitiveness.

The VW Group is the prime example of European carmakers’ struggle in the price sensitive, third largest automotive market in the world. While omnipresent in other markets globally, the group only managed to secure a market share of 2% in over two decades. This basically means that the company isn’t able to meet market demand.

On top of that, stricter carbon emission guidelines will be introduced domestically by 2027 and require local investments in Electric Vehicles (EV) platforms to stay price competitive. The VW Group initially allocated USD 1 billion for such investments, which are reportedly being reduced to USD 700 million in a way of redistributing funds between markets. All at a critical moment given VW Group’s readiness for an EV in India by 2028 at the earliest.

According to Bloomberg (via Yahoo Finance), various options are under consideration before additional funds will be approved internally:

On paper, scaling back investments appears prudent given VW Group's current pressures: intense competition in China (the world's largest automotive market), lack of price competitiveness in EVs, persistent software issues, and eroding profit margins. Yet this strategy risks accelerating VW's decline rather than stabilising it. But I think this could add additional risk in established markets in the future.

Indian market leaders are investing billions not only to defend domestic positions but to execute "Make in India for the World" strategies, building globally competitive manufacturing at margins European players can no longer match. India is already the third-largest automotive market globally and growing rapidly. By reducing commitment now, VW risks ceding the market entirely to established Indian players and Japanese / Korean market leaders. That strategic retreat could intensify competitive pressure on VW in established Western markets as well, as Indian manufacturing capacity gains scale and export reach. The question is whether cost-cutting provides genuine relief or merely delays a more fundamental reckoning.

Sources: Bloomberg, Yahoo Finance, Factor Data

We recently reported on Deutsche Bank's plans to divest its retail branches. This second attempt in eight years appears to be gaining traction, with negotiations now progressing in India.

According to The Economic Times, Kotak Mahindra Bank and Federal Bank are in negotiations to acquire Deutsche Bank’s retail and wealth management business in India consisting of personal loans and mortgages. Deutsche Bank’s assets under management are valued at around INR 25,000 crore (EUR 2.78 billion).

India is the only market outside Europe where Deutsche Bank runs retail branches, an outlier situation that the bank intends to change to improve cost structures.This mirrors similar moves by competitors like Citi, which have exited or scaled back retail operations in India's highly competitive banking market where local players dominate and margins remain thin.

Apart from a trend in the banking sector, M&A development in terms of Indian businesses acquiring European assets has been strong in general. Indian M&A into Europe has reached USD 5.7 billion in 2025 including Tata Motor’s recent acquisition of Iveco Group.

Indian businesses benefit from well-capitalized balance sheets and a large, growing domestic market that funds expansion and innovation. European businesses, by contrast, face structural headwinds:

For Indian acquirers, European assets, whether banking franchises, manufacturing capabilities, or industrial operations, offer established market positions, technology, and brand value at valuations that reflect these pressures. I expect this acquisition trend to continue as valuations remain attractive and Indian businesses continue gaining both financial capacity and strategic ambition.

Sources: The Economic Times

I’m super excited to announce the launch of India Rising Perspectives, a new product of exclusive collaborations that brings you a multi-part series from leading organisations dedicated to providing strategic insider views on India's economic rise.

And we are launching with an incredible inaugural partner.

Our first series, "Inside the $1 Trillion Economy", is an exclusive collaboration with authors from Guidance Tamil Nadu. And the first issue will be published this week!

Find all details here.

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