A recent report by Khaitan & Co., titled Foresight 2026 and shared exclusively with ET, outlines how Indian banks, private equity funds, and corporates will navigate a transformed legal and regulatory landscape amid global headwinds.Also Read: RBI advocates disclosure of NPA, inspection info; banks oppose; matters in CIC
Rabindra Jhunjhunwala, Partner, Khaitan & Co., said that across regulation, capital formation, and sectoral policy, the country is moving from permissive growth to structured scale, from regulatory ambiguity to risk-based scrutiny, and from capital inflows driven by opportunity to those anchored in compliance, governance, and operational substance.
“This shift is evident across deal financing, competition law, foreign investment, sanctions exposure, or digital regulation, which are all becoming increasingly anchored in resilience, transparency, and accountability,” adds Jhunjhunwala.
The report suggests that for decades, Indian banks were barred from funding share acquisitions. However, come April 2026, this will change when the Reserve Bank of India’s draft framework on acquisition financing takes effect. Banks will now be able to finance up to 70% of an acquisition’s value, provided that acquirers bring in 30% of the equity from their own funds.
Also, the country’s private equity market is transforming. With alternative investment fund commitments crossing Rs 15 lakh crore, secondary funds are emerging as core market infrastructure rather than opportunistic exits.
Recent transactions such as continuation vehicles by ChrysCapital (National Stock Exchange of India), Multiples (Vastu Housing Finance, Quantiphi, and APAC Financial Services), Samara Capital and TR Capital (Sahajanand Medical and FirstMeridian), and Kedaara Capital (Lenskart and Care Health) reflect increasing GP adoption of structured liquidity and growing LP confidence in Indian secondary opportunities.The report cautions that sanctions have become one of the most consequential global regulatory risks for businesses and are poised to accelerate this trajectory. Indian companies designated by US, EU, and UK authorities in 2025 highlight the growing extraterritorial reach of enforcement. Secondary sanctions, once peripheral, are now the primary weapon, exposing even non-US entities to direct penalties.
India’s foreign investment regime is set for a period of regulatory refinement, with adjustments aimed at greater consistency and predictability. Press Note 3, introduced in 2020 in the context of border tensions, will continue to influence how investments from land-bordering jurisdictions are tested.
“However, as relations between India and China stabilise, the scrutiny is expected to evolve from a purely origin-based filter to a nuanced, risk-based approach,” said Moin Ladha, Partner at Khaitan & Co., in the report. “In practice, this may translate into greater emphasis on examining control rights, board participation and ultimate beneficial owner layers, and the sector in which the Indian entity operates,” he adds.
The report also predicts steady and sizeable growth in the Global Capability Centres (GCCs) space. India serves as a critical engine for global innovation, digital transformation, and strategic operations. Already home to over 1,800 GCCs and directly employing nearly 1.9 million professionals, India is poised to expand further and is projected to grow to nearly 2,500 centres and exceed Rs 9 trillion (~$100 billion) in annual revenues by 2030.
Swathy Ramanath, Partner at Khaitan & Co., said GCCs in India are increasingly transitioning from cost-arbitrage centres to strategic innovation hubs. “As operating costs increase in traditional metros and mid-size global companies seek agile innovation models, the next phase of India’s GCC expansion is expected to be driven by Tier-2/Tier-3 locations such as Pune, Coimbatore, Ahmedabad, and Visakhapatnam,” said Ramanath.