Global private equity firms are expecting lower returns from India in the next six months as a booming economy and stock market drive up valuations, a new study shows.

But the survey, by Deloitte Corporate Finance Services India, found that interest in India remains unabated, with most private equity firms expecting greater investment in the country over the next year.

"There is no more low-hanging fruit. India has been discovered. We will see more moderate - 20-25 per cent - returns going forward," the survey quoted respondents as saying.

The volume of private equity deals in India has reached a new record this year, with about $6bn of deals done so far, up 50 per cent compared with the total for all of last year, according to Dealogic, the data company.

Many of the global firms are already active in the country while others are expected to arrive soon, such as KKR, which is looking for an India head.

India first attracted the attention of global private equity firms in 2005 after Warburg Pincus made about six times its original investment when it sold its stake in mobile company Bharti Airtel.

But the investment environment in India is tough for private equity firms, with leveraged buyouts banned and the families who control many of the country's companies reluctant to sell majority stakes.

Of the respondents in the Deloitte survey, 84 per cent said they expected an increase in investment activity in the next six months coupled with 91 per cent who believed competition would be tighter.

The survey found that 52 per cent of respondents expected returns from private equity exits to fall over the next six months.

The majority also believed that regulatory changes, such as restrictions on the issue of convertible preference shares used by private equity for real estate deals, had made structuring transactions more difficult.

"You've got a lot of money chasing too few good deals," said Sunil Kakkad, head of the India practice at Lawrence Graham, a London-based international law firm.