India and Southeast Asia to Drive Asia-Pacific Industrial Deal Growth in 2026: PwC

Asia-Pacific is emerging as the sole bright spot in global industrial mergers and acquisitions, with deal volumes projected to increase by 2% in 2026, according to PwC’s mid-year M&A outlook. This stands in stark contrast to an anticipated 7% decline worldwide. The report highlights India and Southeast Asia as principal destinations for manufacturing investments, driven by the ongoing diversification of production and supply chains beyond China.

India’s Strategic Advantage The forecast reinforces India’s growing appeal as a manufacturing hub. PwC notes that India, along with Southeast Asia, will continue to attract capital as multinationals reorganise their supply chains to reduce tariff exposure and secure access to key markets. This aligns with the government’s Make in India and Production-Linked Incentive (PLI) schemes, which have already spurred investments in electronics, pharmaceuticals, and automotive sectors.

Industrial manufacturing is expected to outperform most other subsectors globally, with deal volumes rising 5%. Within Asia-Pacific, Japan and South Korea are also likely to see activity linked to automation, battery technologies, and electronics. However, India stands out due to its large domestic market, improving infrastructure, and demographic dividend.

Automation and AI Infrastructure as Core Themes PwC’s analysis points to a clear strategic shift: manufacturing deals will increasingly target assets that support artificial intelligence infrastructure, grid resilience, and automation. Robotics, industrial software, sensors, and connected systems are in focus, as they boost productivity and reduce labour dependency. The median share of industrial manufacturers with highly automated processes is projected to jump from 18% in 2023 to 50% by 2030, underscoring the centrality of automation in investment strategies.

For India, this means opportunities in domestic automation firms, industrial software, and AI-enabled manufacturing. The country’s burgeoning startup ecosystem in industrial tech and SaaS could attract both venture capital and strategic acquirers.

Supply Chain Realignment The report highlights that companies are localising production and reorganising supply chains to mitigate geopolitical risks and tariffs. Corporate carve-outs and manufacturing businesses benefiting from localisation in India and Southeast Asia could offer attractive deal opportunities. However, cross-border transactions will remain uneven due to ongoing geopolitical uncertainty, tariffs, and shifting industrial policies.

Implications for India’s Growth Story The PwC forecast is more than just a number—it signals a structural shift in global capital flows towards Asia-Pacific, with India at the forefront. As global manufacturers seek alternatives to China, India’s improving ease of doing business, skilled workforce, and expanding industrial base make it a compelling destination. The deal volume growth in industrials and services also reflects confidence in India’s long-term economic trajectory.

For investors and policymakers, the key takeaway is that India’s manufacturing sector is not just catching up; it is becoming an integral part of global supply chains. The emphasis on automation and AI also suggests that India must continue upgrading its industrial capabilities to remain competitive.

Conclusion PwC’s data underscores a pivotal moment for Asia-Pacific industrial deal-making. India and Southeast Asia are set to capture a larger share of manufacturing investments as the world reconfigures its supply chains. For India, this represents both an opportunity and a challenge: to convert rising deal volumes into sustainable industrial growth and technological leadership.