Kick-starting India’s offshore bond market

Author: Ashley Lee | Published: 23 Feb 2015

Local corporates need new financing options. If offshore debt capital markets are to be a solution, some long-proposed reforms must reach fruition

Standard & Poor's is optimistic about Indian corporates' ability to issue bonds internationally. Earlier this year, the rating agency predicted that cross-border debt offerings by local companies could nearly double to $25 billion over the next few years.

It's a message that could buoy potential issuers, of which there are many. In a country where corporates – and public sector financial institutions – are now highly leveraged, new sources of capital are needed.

The shortage of finance options has been appreciated for some time. A Hundred Small Steps, a 2009 report on India's financial sector reforms by the Committee of Financial Sector Reforms, recommended removing restrictions on outflows by corporates and individuals. It also suggested liberalising, and then eliminating, restrictions on foreign investors' participation in rupee-denominated debt, including corporate and government...