Dealmaking in Asia-Pacific started 2025 on uncertain footing, registering an 8% decline in total deal volume compared to the same period last year, according to data and analytics company GlobalData.

However, while global headwinds such as geopolitical tensions and inflationary pressures weigh on investor sentiment, not all parts of the region have faltered. India and Japan have emerged as rare bright spots.

GlobalData’s lead analyst Aurojyoti Bose highlights diverging paths in the APAC market. While caution and consolidation dominate overall deal trends, select economies are forging ahead, “Analyzing the trend across various deal types and key markets reveals both challenges and opportunities that stakeholders must navigate,” says Bose.

Venture financing bore the brunt of the pullback, falling by 13% year-on-year in the January-February period. The sharp contraction reflects increasing conservatism among venture capitalists facing an unpredictable macroeconomic climate.

Mergers and acquisitions ( M&A ), typically seen as an indicator of corporate confidence, also slipped 5%, suggesting companies are revisiting or taking a wait-and-see attitude to expansion strategies.

Seeking long-term value

Private equity, however, showed signs of resilience. Deal volume held steady, indicating that strategic investors are still on the lookout for long-term value despite broader market volatility.

Regionally, the dealmaking picture is far from uniform. China, once a juggernaut in deal volume, saw activity slump by more than 20%, weighed down by regulatory overhangs and economic uncertainty. In contrast, India posted over 10% growth in deal volume, and Japan delivered a 35% surge. These gains signal investor confidence in structural reforms, backed by a strong digital push and robust domestic demand, GlobalData says.

With a more region-specific investment lens likely to dominate for the rest of 2025, Bose says emerging economies in Asia are well positioned to attract capital looking for growth in an increasingly fragmented global environment.

Elsewhere in the region, however, the mood is more subdued. Australia and South Korea reported double-digit declines in deal activity, while Singapore and Malaysia were also not spared, with both witnessing a slowdown in early 2025.

Globally, deal volume dropped 9%, with Europe hit the hardest, contracting 16%, while North America and the Middle East were relatively less affected.

“While global deal activity slows, markets like India, Japan, and the UAE show resilience, driven by stable economies and demand for innovation,” Bose adds.