India’s Fintech Sector Poised for 31% Growth Over Four Years

The Indian fintech sector is projected to grow at a remarkable 31 percent compound annual growth rate (CAGR) through the next four years, according to a report released by KPMG India. This forecast highlights a significant transition within the country’s fintech ecosystem, moving from a phase of rapid expansion to one focused on resilience, governance, and profitability.

Digital public infrastructure, including systems like Unified Payments Interface (UPI), Aadhaar, and the Account Aggregator framework, plays a crucial role in supporting this transition. The report indicates that approximately 60 percent of total fintech funding in the first half of 2025 has been directed towards the lending and payments segments. This trend underscores the growing investor confidence in these mature and stable sub-sectors.

After witnessing a peak in funding during 2021, the report notes a notable rebound in deal activity for the first half of 2025. There were 12 deals exceeding $50 million during this period, a marked increase compared to just one deal in the same timeframe in 2024. This resurgence indicates a strategic shift among investors, focusing on quality and scale.

New Phase of Evolution

Akhilesh Tuteja, Partner and Head of Clients and Markets at KPMG in India, commented on this evolution, stating, “India’s fintech evolution is entering a new phase—one where embedded finance, powered by responsible AI, redefines how financial services integrate into daily life.” He emphasized that innovation must be complemented with governance, resilience, and ethical safeguards. Tuteja also noted that talent will be the key differentiator, shaping a workforce capable of navigating advanced technologies and regulatory complexities.

Sanjay Doshi, Partner and Head of Transaction Services and Advisory in Financial Services at KPMG in India, further elaborated on the potential of digital public infrastructure. He remarked that it has unlocked immense opportunities for growth. However, he stressed that lasting success will hinge on institutionalizing trust, embedding rigorous governance, and pursuing transparent and profitable growth strategies.

As the fintech landscape in India continues to evolve, the focus will increasingly be on building models that are compliant, customer-centric, and scalable. Tuteja concluded that this moment represents a pivotal opportunity for India to establish itself as a global benchmark for financial transformation, where innovation can thrive responsibly.

The growth trajectory of India’s fintech sector not only reflects the resilience of its business environment but also highlights the imperative for companies to adapt and innovate in a rapidly changing landscape.