Wall Street Just Got Backdoor Access to India's $639B Credit Boom

India might've just given Wall Street its next credit playground. In a quiet but significant move, the financial regulator for GIFT City has approved the use of total return swaps (TRS) on corporate bondsnot just sovereign debt. That means global players like HSBC and Standard Chartered can now offer international investors synthetic access to rupee-denominated company debt, without requiring them to open a local account. It's a structure tailor-made for speed and scaleand it's landing just as India's private credit scene hits record highs, including a $3.4 billion raise by Shapoorji Pallonji Group, the country's largest private credit deal to date.

TRS has already been gaining steam thanks to India's upcoming inclusion in global bond indexes. That inclusion helped funnel $22 billion into government debtand this new layer could do the same for corporate bonds. We've seen good volume growth through our GIFT City branch, said Sachin Shah, managing director at Standard Chartered India, noting strong inbound interest from global funds. HSBC HSBC confirmed it's also ready to offer swaps for corporate paper, riding a wave of fresh appetite for yield and exposure.

For now, the swap approvals only cover rupee-denominated bonds. But banks are already pushing to extend access to dollar bonds issued by Indian companies through GIFT City. The International Financial Services Centres Authority isn't saying yes just yetbut it is preparing a consultation paper that could open that door. If it does, this may mark a turning point for India's $639 billion credit marketand reshape how foreign capital flows into one of the world's fastest-growing economies.