India alternative investment market projected to reach USD 2 trillion by 2034

India’s alternative investment market is projected to grow more than five-fold to reach USD 2 trillion by 2034, according to a report by EY and Julius Baer. This expansion is driven by increasing participation from high-net-worth individuals and family offices seeking higher-yielding, less-correlated assets. Currently, the market is estimated at approximately USD 400 billion, including USD 156 billion in SEBI-registered Alternative Investment Funds (AIFs).

Family offices are becoming transformative forces in the ecosystem, moving from passive investing toward direct investments and participating as limited partners in private equity and venture capital. Investment focus is expanding into sectors such as artificial intelligence, climate technology, renewable energy, semiconductors, and digital infrastructure, though real estate remains a significant area.

In the private credit sector, recent data shows a slowdown in deployments. During the first half of 2026, the market recorded USD 3.5 billion in deployments, a 61 per cent decline from the USD 9 billion recorded during the same period last year. This decline is attributed to investors becoming more selective amid economic uncertainty. Despite this year-on-year drop, activity remains steady compared to the second half of 2025. Domestic investors accounted for nearly three-fourths of these deployments, with real estate, healthcare, and food and beverages leading the sectors for funding.