AbstractIndia's gross domestic product has been growing at more than 8% in the past few years, making it the fourth‐largest economy in terms of purchasing power parity. According to a Goldman Sachs report, India could become the second‐largest economy in the world by 2050. The key growth drivers are investments in infrastructure, domestic consumption, and a hub for global outsourcing. This is further supported by growth‐oriented policies by the government. The favorable environment has led to the growth of the private equity market. India received approximately U.S. $17.5 billion of investments in private equity in 2007, making it the number‐one destination in Asia. Indian private equity has been mainly focused on providing growth/expansion capital to the company as compared to buyouts in the developed markets. © 2008 ICICI Bank Limited. Printed with permission.