How Infra Escaped The Debt Trap

India’s Infrastructure Financing Has Shed Its ‘House Of Debt’ Thanks To Diversification

By Amritha Pillay

What?

India’s infrastructure sector, once known for its stressed bank assets and stalled projects, has finally successfully diversified its financing ecosystem making it less dependent on traditional bank credit. 

A decade after the famous 2012-13 ‘House of Debt’ report by Credit Suisse warned about the high debt levels of India’s infrastructure conglomerates, the sector has now been redefined thanks to policy shifts, new investment vehicles and cleaner balance sheets. 

According to the latest Economic Survey, India’s infrastructure financing landscape’s shift from a "historical dependence on bank credit toward a diversified ecosystem of alternative financing vehicles and capital market instruments" is timely. 

A series of debt resolution policies, infrastructure project re-modelling, introduction of alternate finance instruments and a host of distressed asset acquisitions have ensured that the infrastructure financing eco-system in India has finally come of age.

The clean-up of legacy stressed assets is nearing completion, replaced by a trillion rupees plus mature market for alternative assets.  

How? 

A series of debt resolution policies, infrastructure project re-modelling, introduction of alternate finance instruments and a host of distressed asset acquisitions have ensured that the infrastructure financing eco-system in India has finally come of age. 

In the 2012-13 era, the sector was plagued by issues like huge funding demands of large public-private-partnership (PPP) road projects, uncertainty over fuel sourcing for power plants, infrastructure conglomerates spreading themselves thin with debt-heavy ambitions, and limited possibilities to source funding for a sector where operational assets were still nascent.

“The bulk of legacy stressed assets have been sliced up and monetised, barring some scattered pending litigations,” Gahan Singh, a Partner in the Energy Infrastructure and Resources Practice Group at Khaitan & Co, told The Core. 

Assets Under Management (AUM) for Infrastructure Investment Trusts (InvITs) reached approximately Rs 6.28 lakh crore in fiscal 2025, growing at an 18% CAGR since 2021. Roads account for nearly 40% of this value.

The National Highways Authority of India (NHAI) has raised nearly Rs 49,000 crore through the Toll-Operate-Transfer (TOT) model as of FY25.

The IL&FS group has repaid Rs 48,463 crore to lenders as of September 2025, reaching nearly 80% of its resolution target.

A key distinguisher from a decade ago to now is also how infrastructure projects are funded and executed with more distributed risks. 

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Blockchain Stablecoins May Offer A New Way To Send Money to India

By Vishwas Ved

What?

Indians working overseas send back more money home than those from other countries. 

According to an estimate, Indians in various parts of the world, including the Gulf, the US, and Europe, remitted about $135 billion in FY25. It’s way ahead of Mexico, which is in second place with $68 billion, and China at $48 billion.

These remittances support families and take care of both major and day-to-day expenses. 

Due to these delays, coupled with high transaction fees and foreign exchange charges, the need for a faster, more cost-effective, and 24/7 cross-border payment method has become more evident. 

That’s why financial innovators have been exploring alternatives to the traditional payment infrastructure. One of them is stablecoins.

Why It Matters

Stablecoins are digital tokens linked to regular currencies such as the US dollar, and they move on blockchain networks that are available round the clock.

Large payment networks and fintech companies such as Visa, Mastercard, PayPal, and Stripe are already testing this model by integrating stablecoins into their global payment infrastructure for faster transfers and settlements.

For families in India that depend on remittances, this could mean receiving funds within minutes.

With stablecoins, the sender can convert funds into digital dollars and transfer them to a wallet of the recipient in India. The recipient can then convert them into rupees through local exchanges.

Will this method become common in India soon? 

This series is brought to you in partnership with Algorand India.

55 million

That’s how many iPhones Apple assembled in India in 2025 — about 25% of its global production.

Apple has been steadily diversifying its supply chain away from China, a shift that has accelerated in recent years amid tariffs, geopolitical tensions and a growing pressure on companies to reduce reliance on Chinese manufacturing.

By the Numbers: India produced about 55 million iPhones last year out of Apple’s roughly 220 million to 230 million devices manufactured worldwide, according to a Bloomberg report. 

Impact: The company has rapidly expanded its production footprint in the country and now manufactures a wider range of models there. Apple has also begun assembling newer iPhone models in India closer to their global launch timelines, reflecting the country’s rising importance in its supply chain.

India is also emerging as a key consumer market for Apple. The company shipped about 14 million iPhones in the country last year, a 9% increase from the year before, according to Counterpoint Research. Bloomberg reported that total iPhone sales in India crossed $9 billion in 2025. 

Outcome: Apple is also exploring the launch of Apple Pay in the country and continues expanding its retail presence, opening its sixth store in India last month.

Reliance To Boost LPG Output

In a statement issued late Tuesday, Reliance Industries said it was maximising LPG production at its Jamnagar refining complex and diverting natural gas from the KG-D6 Basin to priority sectors, in line with government guidelines. The move comes amid LPG shortages in Mumbai and Bengaluru and a Rs 60 hike in household cylinder prices.

Setup: The announcement signals corporate India responding to government pressure to prioritise domestic supply over exports. However, Reliance did not specify production targets, timelines, or how much additional LPG will reach markets. "For Reliance, India's energy security and the well-being of millions of Indian families always come first," the company said.

The government has invoked the Essential Commodities Act and ordered refiners to maximise LPG production while prioritising household cooking gas. State-run Indian Oil has also urged consumers to avoid panic buying, saying the country holds ample fuel stocks and that supply lines remain operational.

At the same time, Indian Oil, Bharat Petroleum and Hindustan Petroleum have said they are boosting LPG output and directing supplies toward domestic consumers. Officials also said that they expect tighter liquefied natural gas supplies and plan to ramp up coal-fired power generation during the summer months to meet electricity demand.

Break: Meanwhile, Iran has signalled openness to a ceasefire as long as the United States guarantees no further attacks on the country.

India’s airlines are affected by the war, too. Air India and IndiGo have cancelled or rerouted several international flights because of airspace restrictions linked to the conflict. The disruption comes on top of the Pakistan airspace ban, which has already forced longer and costlier routes for Indian carriers, as The Core previously reported.

Air India said in a statement on Tuesday that it was raising its fuel surcharge on domestic and international routes because of costly jet fuel. This will be rolled out in a phased manner. “Air India regrets the need to increase fuel surcharges in this manner, but emphasises that it is necessitated by factors outside its control,” the statement read.

IndiGo Chief Exits

Pieter Elbers, the CEO of India's largest airline, IndiGo, resigned on Tuesday, a couple of months after mass flight cancellations brought Indian aviation to a standstill. His resignation comes into effect immediately.

Context: The airline made headlines in December as it cancelled over 4,000 flight causing severe trouble to passengers and the aviation industry alike. This was reportedly because of facing a shortage while implementing new flight duty norms. Regulator Directorate General of Civil Aviation (DGCA) probed the incident and has submitted a report to a panel.

What Next? Rahul Bhatia, the Managing Director, will manage the company in the interim. "IndiGo will continue to sharpen its strategic focus on serving India and her people with an airline that is professionally managed, operationally reliable and globally respected," Bhatia said in a statement.

Fuel First, Sanctions Later?

Amid an escalating conflict in West Asia, the think tank Global Trade Research Initiative (GTRI) has urged the government to stop the export of petrol and diesel, among other measures, to protect the interests of its citizens.

Catch Up Quick: GTRI has also said that the government must sign long-term crude oil supply contracts with Russia while ignoring or opposing America's attempts to "influence India’s purchases of oil from third countries".

Context: "In this uncertain environment, India’s energy security cannot depend on short-term market purchases or temporary policy permissions issued by Washington," the GTRI said, alluding to the temporary waiver of US sanctions on India buying Russian crude. GTRI also highlighted that India and Russia were sovereign nations and the US had no jurisdiction over their bilateral energy trade.

FDI Gates Reopen

India has eased foreign direct investment (FDI) rules governing investors from countries sharing land borders with it, including China, revisiting the Press Note 3 framework introduced in April 2020.

Flashpoint: Press Note 3 required prior government approval for any investment from neighbouring countries such as China, Pakistan, Bangladesh, Nepal, Bhutan, Myanmar and Afghanistan, shifting these proposals from the automatic route to the government approval route. The curbs were introduced during the Covid-19 pandemic amid rising tensions with China.

Turning Point: Officials said the government is now easing parts of the framework while retaining scrutiny over investments from neighbouring countries.

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Markets Rebound On Falling Gas Prices

On Episode 819 of The Core Report, financial journalist Govindraj Ethiraj talks to Nikhil Dubey, senior research analyst, refining and modelling at Kpler. We also feature an excerpt from our India Energy Week conversation with Kamal Kishore Chatiwal, Managing Director of Indraprastha Gas Limited (IGL).

• Markets rebound on falling gas prices and likely relief on Iran war.

• An insight into India’s ambitions of piping gas to homes.

• Why oil is less of a challenge for India despite the Strait of Hormuz shutting down.

• Apple is now producing 25% of its iPhones in India now.