What explains the rush among global majors to India — its tech industry and capital market?

Global corporations are increasingly turning their gaze toward India, drawn by the country’s booming technology sector and rapidly expanding capital markets. The recent flurry of initial public offerings (IPOs) and strategic tie-ups in the tech space underscores a calculated bet by foreign investors that India is no longer just a large consumer base but also an incubator for future growth in digital and industrial technologies.

South Korean investment surge

South Korean conglomerates have been among the most prominent players accelerating their presence in India’s financial markets. LG Electronics and Hyundai Motor, two of the nation’s largest industrial firms, recently listed their Indian subsidiaries on local stock exchanges to raise capital for expansion.

The results were striking. On the day of its IPO, the shares of LG Electronics India surged 50 per cent, lifting the company’s valuation from the initial Rs 774 billion ($8.7 billion) to Rs 1.13 trillion ($12.7 billion). Remarkably, this valuation surpassed that of LG’s parent company listed on Seoul’s stock market, which stood at 14.5 trillion won ($10.1 billion), according to a report.

Such market exuberance reflects more than investor optimism about individual companies. Analysts point to the broader structural factors driving foreign capital toward India: a combination of strong domestic demand, an emerging middle class with rising disposable incomes, and a financial ecosystem increasingly receptive to global investors. The success of these IPOs signals to multinational corporations that India can support large-scale capital raises that rival more established markets.

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AI companies and the digital frontier

Beyond traditional industrial giants, foreign technology firms especially in artificial intelligence are racing to capture India’s massive online population. Companies like Google and Perplexity have partnered with Indian telecom operators to provide free services, mirroring strategies that have previously accelerated the growth of digital media distribution and mobile internet adoption in the country. OpenAI has followed suit, making intermediate-level services available for free since last Tuesday, reflecting a broader recognition of India as a critical market for AI adoption.

India’s internet ecosystem, with over a billion users, offers companies a unique testbed for scaling AI solutions in a highly price-sensitive but increasingly tech-savvy population. Free or subsidised digital services have the dual effect of expanding user bases and generating data, which is critical for refining AI models, a win-win scenario for foreign investors aiming to establish a foothold.

The convergence of capital and technology

The confluence of India’s robust capital market and its burgeoning technology sector is driving this rush by global majors. IPO successes like LG India provide the financial muscle companies need to expand operations, while strategic partnerships in AI and digital services ensure market penetration in one of the world’s most competitive consumer landscapes.

Economists argue that this is a structural trend rather than a short-term market phenomenon. India’s regulatory environment, combined with proactive incentives for foreign direct investment and a deepening stock market, creates an ecosystem where global companies can simultaneously raise funds and scale technology adoption. This dual approach financial capitalisation and technological integration is increasingly seen as essential for global majors seeking sustainable growth in emerging markets.

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Challenges ahead

Despite the promise, challenges remain. India’s market is complex, with diverse consumer preferences, regulatory hurdles, and infrastructure gaps that can slow expansion. For AI companies, issues such as data localisation laws, privacy regulations, and internet penetration disparities across regions require careful navigation. Similarly, IPOs, while lucrative, also expose foreign firms to volatility in local equity markets, currency fluctuations, and geopolitical risks.

Nevertheless, the appetite for India appears undiminished. The combination of a thriving tech industry, rapidly expanding capital markets, and a massive user base provides a rare convergence of opportunity for multinational corporations. As LG, Hyundai, and leading AI companies demonstrate, India is no longer merely a destination for outsourcing or incremental growth, it is increasingly seen as a strategic hub for innovation, investment, and market expansion.