Fintech industry in India: market overview, growth and investment opportunities
India has the second-largest fintech sector in the world.
Schedule a meeting nowIndia’s fintech industry is one of the fastest-growing in the world. The market was estimated at $111 billion in 2024 and is projected to reach $421 billion by 2029, growing at a CAGR of over 30%, making it one of the most dynamic investment destinations in the global financial technology landscape.
India is home to over 3,000 registered fintech startups, spanning payments, lending, insurance, wealth management and embedded finance. The sector’s rapid growth is driven by a combination of factors: a vast underbanked population increasingly gaining access to digital financial services, one of the world’s largest smartphone user bases, and a government-backed digital infrastructure, including UPI, India Stack, and the JAM trinity, that has made digital payments and financial inclusion a national priority.
India’s UPI payment system alone processed over 18 billion transactions per month in 2024, underlining the scale and pace of digital financial adoption in large part due to the expansion of the e-commerce sector in India in recent years. With the EU-India Free Trade Agreement (FTA) now opening India’s financial services market further to European firms, the timing for European fintech and financial services companies to establish or expand their presence in India has rarely been better.
Snapshot of the Indian fintech sector
- India is home to over 10,500 registered fintech startups, making it the third-largest fintech ecosystem in the world by number of companies, accounting for 14% of total national startup funding.
- UPI alone processed over 131 billion transactions worth $2.4 trillion in FY2023-24, growing at 57% year-on-year. Transaction volumes are projected to reach 439 billion by FY2028-29, with UPI already accounting for over 80% of all retail digital payments in India.
- India’s fintech market, valued at approximately $110 billion in 2024, is projected to reach $420 billion by 2029, a near fourfold increase driven by digital lending, wealthtech, insurtech, and embedded finance.
- Financial inclusion has expanded dramatically: 560 million Jan Dhan accounts have been opened, bringing the vast majority of India’s adult population into the formal banking system for the first time.
- India leads the world in fintech adoption, with 87% of digitally active adults using at least one fintech service, significantly above the global average of 67%.
The EU-India Free Trade Agreement includes a dedicated Financial Services Annex, the most comprehensive fintech cooperation framework India has ever agreed with an international partner. For European financial services and fintech companies, it creates concrete and immediate opportunities in one of the world’s fastest-growing digital finance markets.
Key provisions include 74% FDI in banking and 100% in insurance, 15 new EU bank branch licences over four years, and a commitment to interoperability between payment systems, including India’s UPI network. Dedicated cooperation on RegTech, SupTech, and Central Bank Digital Currencies reduces the compliance friction that has historically made cross-border fintech expansion complex.
Initial benefits are expected from 2027, making now the right moment for European companies to establish partnerships and position themselves ahead of the curve.
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Growth drivers of India's Fintech sector
- India is the world’s third-largest fintech ecosystem by number of companies and by funding, behind only the United States and the United Kingdom, with over 10,000 registered fintech startups.
- The ecosystem spans a wide range of sub-segments including payments, digital lending, insurance, and wealth management.
- India also benefits from one of the world鈥檚 largest pools of highly skilled IT professionals, supported by the strong technology sector in India.
- The number of smartphone users in India crossed 1 billion in 2024, creating a vast and rapidly expanding base for mobile-first financial services.
- The Indian government has been a key enabler of fintech growth through initiatives including UPI, India Stack, Start-up India, the Unified Lending Interface (ULI), and Bharat BillPay, creating world-class digital infrastructure that private sector players can build on.
- India leads the world in real-time payments, with a 48.5% share of global real-time payment transactions and an adoption rate of 87%, well above the global average.
Interesting investment opportunities in the fintech industry in India
The fintech industry in India offers a wide range of investment opportunities for international companies and investors. Rapid digitalisation, a large consumer base and strong government initiatives are driving innovation across multiple fintech segments:
- WealthTech: Online investment advisory service and help with managing finances.
- Payments: Online payment options such as PayTM.
- Lending: Technology and digital solutions to facilitate loan search, application and repayment.
- InsureTech: Technological innovations to improve the efficiency of the insurance industry.
- SaasTech: Specific SaaS solutions for the FinTech sector.
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