Synopsis

India's private credit sector could reach USD 100 billion by 2050. This expansion is driven by a maturing ecosystem and growing domestic capital pools. Family offices and UHNIs are increasingly seeking alternative asset classes. Regulators are adopting a calibrated approach to market evolution and reforms.

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Mumbai: India's private credit industry has the potential to expand to USD 100 billion by 2050 from the current USD 25-30 billion, National Pension System (NPS) Trust Chairperson Dinesh Kumar Khara said on Thursday.

This growth will be driven by the growing maturity of the ecosystem and expanding domestic capital pools, the former SBI chairman said at an event by IVCA here.

"Perhaps it can become a USD 100 billion industry at least by the year 2050. That is what my expectation is," Khara said at the IVCA Private Credit Summit 2026.

He said the private credit industry contributes only about 0.6 per cent of the country's GDP but has witnessed strong growth in recent years as industry participants mature.

Khara said the expansion is being supported by the rapid growth of family offices and ultra-high-net-worth individuals (UHNIs) looking at alternative asset classes, along with a widening pool of capital.

"The industry players are maturing. When it comes to the kind of pool of capital which is available, even that is getting enlarged," he said.

He also said the financial sector thrives on trust and the private credit industry, being relatively new, would need to continue earning the confidence of investors and regulators through responsible conduct as it scales up.

On regulation, he said authorities are adopting a calibrated approach and reforms would follow as the market evolves.

"The regulators are now quite open in terms of debating the subject. And if at all they get convinced, then the possibility of reforms is much higher," he said.

Drawing a contrast with overseas markets, Khara said India was in a comfortable position with respect to risks from private credit.

"Fortunately for us in India, we are nowhere comparable to the US. So it's a very comforting situation," he said, adding that regulators continue to monitor the sector's evolution closely.

Khara also said the NPS Trust is developing a framework to facilitate investments in private credit by pension fund managers and expects the initial process of inviting and screening applications to begin by September.