After several years of rapid growth, India's Private Equity industry is at a turning point as funds face up to the challenges generated by the global financial crisis. According to the International Monetary Fund (IMF), India's GDP is expected to expand to 5.4 percent in 2009 and with its growth rate expected to accelerate as the rest of the world recovers from global financial crisis, India has the potential to remain a very attractive destination for Private Equity funding. However, although the Indian economy - driven by domestic demand - has to some extent been protected from the global downturn, share prices were impacted.  And despite the fact the stock market has now recovered it is more volatile which means that high returns on exit are no longer guaranteed.