India seeks $10 bn investment from London-based funds

 The “initial” investments from London-based fund houses are expected to pave the way for a significant influx of “patient capital” into India’s growing infrastructure sector. In the first phase, funds from London will be encouraged to bid on 8-10 National Highways Authority of India (NHAI) projects, along with three multimodal hubs in the National Capital Region.

India is targeting US$ 10 billion in investments from City of London-based funds for key infrastructure projects, including highways and rapid transport systems in the National Capital Region, by next year. These initial investments from London fund houses are expected to bring long-term “patient capital” into India’s growing infrastructure sector, according to official sources.

A senior official stated, “The aim is to deliver 4-6 marquee projects with the participation of a few big international players. Then they will become demonstration projects.”

Earlier this month, Niti Aayog CEO B.V.R. Subrahmanyam led discussions in London, highlighting India’s vast investment potential. Last September, a Financing Bridge agreement was signed between the City of London Corporation and Niti Aayog, aimed at channeling a portion of the trillions managed by London-based asset managers into Indian projects.

In the first phase, funds from London will be encouraged to bid on 8-10 National Highways Authority of India (NHAI) projects, along with three multimodal hubs in the National Capital Region—Anand Vihar, Sarai Kale Khan, and Ghaziabad. These hubs are designed to integrate with Indian Railways, airports, Inter-State Bus Terminals (ISBTs), and the Delhi Metro for seamless connectivity.

Currently, India’s infrastructure development is largely funded through domestic sources, including government budgets. Global investors like the Canada Pension Plan Investment Board (CPPIB) have already invested significantly, with CPPIB contributing US$30 billion to India, US$ 10 billion of which is in infrastructure.

With the need for trillions in infrastructure investments to support sustained economic growth, the government is seeking more global capital. Officials report that 99% of investor concerns, such as land issues, bidding processes, and environmental, social, and governance (ESG) standards, have been resolved. The focus is on greenfield projects, offering substantial long-term returns.

Despite London’s status as a major financial center, many asset managers have hesitated to invest in Indian infrastructure due to information gaps. A City of London delegation will visit India in November to assess project sites, as India also works to reverse a decline in foreign direct investment (FDI), which fell from US$ 42 billion in FY23 to US$ 26.5 billion in FY24.