Indian venture capital scene is heating up, and total amount of deals has risen 120 percent in second quarter of 2008, compared to the year-ago quarter, according to data from Dow Jones (NYSE: NWS) VentureSource. India attracted $238 million in venture investment with 17 deals closed in the second quarter, a 120 percent increase over the $108 million invested in 12 deals during the same period in 2007. Out of that, $89 million—nearly 37 percent of the region’s quarterly investment total-went to five advertising/marketing companies, more than any other sector. That is a bit misleading, though: the jump was because of a $70 million second-round investment in Laqshya Media, a Mumbai-based provider of out-of-home media advertising services, the second-largest deal ever completed in India.

“This highlights two growing trends within the region—one being a growing interest in advertising plays that capitalize on India’s emerging infrastructure and growing Internet usage; the other being an increase in second-round deals, which is expected as VCs are helping their portfolio companies expand and steering them toward liquidity,” said Jessica Canning, Director of Global Research for Dow Jones VentureSource.

The data showed that India saw seven second-round deals completed inQ2, a record $161 million and exceeding the $118 million that was invested in second rounds in all of 2007. Ten seed and first round deals were also completed during the quarter, accounting for nearly $77 million in investment. No later-stage deals were completed. Overall, India’s Business & Financial Services industry, which includes the advertising/marketing sector, received the bulk of investment with $131 million invested in nine deals. More details here.