Mumbai, Aug 21: India’s private credit market recorded USD 3.5 billion in deployments during January-June 2026, a 61 per cent decline from USD 9 billion during the same period last year, according to an EY report.
The decline comes as investors navigate a more uncertain economic environment and become increasingly careful about new investments. However, the latest figure remains broadly similar to the USD 3.4 billion recorded in the second half of 2025, indicating that private credit activity has remained relatively steady in recent quarters.
Domestic investors continued to play an important role in the market, accounting for nearly three-fourths of private credit deployments during the first half of the year. Foreign investors contributed the remaining share.
Real estate emerged as the leading sector for private credit funding, followed by healthcare and food and beverages. Companies are turning to private credit for a range of requirements, including business expansion, refinancing and other growth-related needs.
The private credit market has become an important alternative source of finance for businesses that may require customised funding solutions beyond traditional bank lending. Such financing can provide companies with greater flexibility while giving investors opportunities to participate in India’s growing economy.
The changing lending environment could influence the private credit market in the months ahead. Increased bank credit availability and regulatory changes may provide businesses with more financing choices, potentially affecting demand for alternative lenders.
Despite the sharp year-on-year decline, the first-half data suggests that private credit continues to have a role in India’s financial system. The market is now moving towards a more measured phase, with investors paying greater attention to economic conditions, business fundamentals and the potential risks associated with each investment.
As companies continue to seek capital for growth and expansion, private credit is expected to remain an important part of India’s evolving financing landscape.