To tap into this demand, venture funds are being launched that seek to raise money from high networth individuals (HNIs) for investments in start-ups. At least two venture funds are currently raising a combined $160 million from Indian investors including wealthy individuals, to invest in start-ups, people involved in the matter said.
"In the first round, it was mostly foreign investors who were chasing the start-ups. Now the Indian HNIs are waking up to this opportunity," said Atul Singh, India head for wealth management at Bank of America Merrill Lynch.
India's e-commerce firms last year attracted more than $5 billion in investment, the bulk of it from overseas investors, compared to less than $2 billion in 2013.
"The return from these investments could be double that of the public equity markets," said a wealth manager at an European bank, declining to be named. "Of course, the risk is also higher and that's why the clients need advice."
Another reason for the enthusiasm among affluent Indian investors is the economy, which is expected to grow 7.4 percent in the year ending March and at a faster pace than China's in the years ahead as a new government kickstarts economic reforms.
For foreign private banks, whose Indian ambitions have so far been held in check by intense competition from local players and sluggish revenues, the developments are welcome.
They are drawn to the long-term potential of the market, where individual financial assets are expected to more than double from last year's level to $5 trillion by March 2019, according to local wealth manager Karvy.
While more than half a dozen foreign private banks operate in India and employ about 300 wealth managers, they are saddled with higher operating costs and struggle with a limited branch network compared with their local rivals.
As a result, the Indian units of some banks, including Credit Suisse Group, slashed headcount in the recent past. Others, such as Morgan Stanley and UBS , exited altogether.
The business landscape is changing now, bankers said.
A regulatory move last year for private banks to separate client advisory services from transactions carried out on their behalf will make wealth managers focus on advice and give them an edge over local rivals because of their global network, boosting fee income and stabilizing revenues, bankers said.
"As a market, we are coming closer to the reality that if you want impartial advice you will have to pay a fee," said Satya Bansal, head of India wealth management at Barclays, which employs 40 wealth managers and plans to add more.