The Indian IT sector experienced a 33% rise in merger and acquisition (M&A) activity in 2025, with 29 deals totaling approximately $743 million by December 23. The surge was driven primarily by the need to build artificial intelligence capabilities ahead of 2026.
The standout deal of the year was Coforge’s $2.35 billion takeover of US-based Encora, marking the largest acquisition by an Indian IT company in the engineering research and development segment. This deal signals the sector’s ambition to expand globally.
The technology industry as a whole saw a robust revival, with total deal values estimated between $26 billion and $29 billion – a nearly 30% increase over the previous year. The acquisitions focused on AI, cloud computing, and digital transformation capabilities.
Industry experts note that Indian IT companies are increasingly looking abroad to acquire specialized talent and technology, particularly in emerging areas like generative AI, machine learning, and automation. This trend is expected to accelerate in 2026.
The M&A activity reflects a strategic pivot by Indian IT firms to move up the value chain and compete with global technology giants. The sector remains well-positioned to capitalize on the growing global demand for digital services.
