Private credit to boom even as bank credit growth softens: S&P Global

Private credit will see robust momentum even as Indian banks’ credit growth remains slightly subdued in the current financial year, hovering between 11–12%, according to Geeta Chugh, Managing Director and Sector Lead, Financial Service Ratings (South and Southeast Asia) at S&P Global Ratings.

Speaking at an event by S&P Global and CRISIL, she noted that the slower pace reflects both bank caution and corporates’ measured approach towards large-ticket borrowing in an uncertain global environment. In contrast, India’s private credit industry has already mobilized $10 billion so far this fiscal, surpassing the total raised during the entire previous year. Once a niche segment limited to real estate distress funding, private credit is now extending to renewables, acquisition financing, and growth capital for corporates, marking its transition into a mainstream financing channel.

On capital expenditure trends, Chugh added that while private capex could be sluggish in FY25 and FY26, the medium-term outlook remains strong. “We are projecting private capex to touch $800–850 billion over the next five years,” she added.

Dharmakirti Joshi, Chief Economist at Crisil, observed that India’s private capex is not growing faster than GDP, a structural challenge that limits its role as a growth engine. Still, he stressed that India has shown resilience in the face of past external shocks. “While global disruptions have caused short-term challenges, they have not derailed India’s long-term growth trajectory,” Joshi said.

He underlined that achieving developed economy status by 2047 will require a delicate balance: strengthening domestic growth drivers, attracting sustained foreign investment, and widening access to global markets. “The economic outlook beyond FY26 will hinge on tariff shocks from abroad, and how effectively India can deploy domestic buffers and policy levers to cushion them,” Joshi noted.

S&P Global also flagged India’s emergence in new growth frontiers. It expects the country to become the second-largest market for data centre power demand in Asia-Pacific by 2028, overtaking Japan and Australia. At the same time, India’s shipbuilding industry is eyeing a place among the top five globally by 2047, backed by defence contracts, coastal infrastructure, and export opportunities.