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India is set to attract $7 billion in private equity dollars by 2010, according to a research report by Bain & Co. Last year, India attracted $2.2 billion in PE money. India's growing consumer class and the increasingly differentiated skill set are two major economic forces that will drive the estimated surge in the size of the Indian private equity market, Bain's India Private Equity Outlook report said. PE investments in the country through 2010 is likely to remain focussed on traditionally smaller growth-capital investments.

Transformational mega-deal buyouts, similar to those in the US and other developed markets, are far more difficult to execute here given government limits on access to foreign leverage and the reluctance of family-controlled businesses to cede control, the report said.

"We have observed early signs that the traditionally strong opposition to change in control issues may be starting to diminish," Bain & Company's Private Equity Practice division head in India and author of the report, Sri Rajan said.

[Via Release]