Over the past decade, Prime Minister Narendra Modi has worked to reduce barriers to foreign investment in India, making the country more accessible to global firms.

Yet, despite this open market policy, many major international corporations—including BlackRock, BMW, and Shein—are opting to enter India through partnerships with local tycoons. This trend strengthens the hold of powerful Indian families on the economy, positioning them as potential global competitors.

While India, the world’s fifth-largest economy, has moved away from its socialist roots and is open for business, navigating its diverse and complex federal system remains challenging for foreign companies. Local partnerships offer international firms an easier way to gain a nationwide foothold, avoid intense domestic competition, or achieve both.

A case in point is BlackRock’s decision to re-enter India after exiting a joint venture with DSP in 2018 due to lack of control. This time, the company is teaming up with Mukesh Ambani’s Jio Financial Services for asset and wealth management.

Though BlackRock will likely not have control over Jio, India’s rapidly growing financial market is too lucrative to overlook. By partnering with Ambani, BlackRock can mitigate the risk of competing against India’s richest man, aggressively expanding into financial services.

Such partnerships have become increasingly attractive to foreign firms, especially after the rush to invest in Reliance Industries in 2020. For instance, Meta Platforms, the owner of Facebook, invested $5.7 billion for a 10% stake in Reliance’s digital and telecom business. While India remains open to US tech giants, Indian conglomerates are simultaneously asserting themselves in sectors like telecommunications and e-commerce, fueled by the growing adoption of smartphones across the country.

New Delhi’s production-linked incentive scheme also promotes collaboration between foreign companies and Indian businesses. By offering subsidies, the government can influence which foreign firms partner with which local players, shaping future leaders in key industries like manufacturing.

This growing trend reflects a balancing act between India’s desire for foreign capital and the entrenched influence of its powerful business families as the country positions itself as an increasingly important global economic player.