Over the last few years, outward capital flows from India have sharply increased. India's outward foreign direct investment touched $48.6 billion in FY26, up from $43.7 billion in FY25. Meanwhile, Indian companies are raising foreign-currency debt at scale, a large chunk routed via GIFT City, where estimates say more than 170 bonds have been listed by more than 50 issuers, raising close to $68 billion. In a nutshell, India has become a key exporter of capital.
However, this shift has still not been matched by trusteeship. This means that when an Indian company raises a dollar bond, Indian banks may finance the deal and Indian lawyers may draft it too. The issue may even be listed through IFSC at GIFT City. However, the trust deed, trustee, security agent, or facility agent is usually an established institution based in London, Hong Kong, or Singapore.
A few examples would help buttress this argument. Three subsidiaries of Adani Green Energy raised $362.5 million through 20-year senior secured notes in 2019 for its dollar bond programme. The borrowers, solar assets, and cash flows were in India. Citicorp International, a Hong Kong-based firm, was appointed note trustee. in 2020, ReNew Power, an Indian renewable energy firm, issued $450 million of senior secured notes due in 2027, with HSBC Bank USA, National Association appointed as trustee. In both cases, while the commercial substance was Indian, the key institution holding the legal mandate was not based in the country.
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This is not an isolated incident. It keeps happening in overseas bond issues by Indian infrastructure and renewable-energy groups, or in syndicated loans where Indian assets and Indian cash flows are the focus while the agency roles sit offshore. India exports capital. However, it is yet to export institutions which can stand beside the capital, if and when things go wrong.
The big question, then, is whether India can build an institution that global borrowers, investors, banks, and lawyers can trust, even without an Indian connection.
Corporate trusteeship is often easy to overlook because, in a performing transaction, little seems to happen. Interest is paid, reports circulate, and the trustee stays in the background. The value is seen only when something goes wrong, such as a covenant breach, a lender dispute, a disputed escrow condition, security enforcement, and so on. The trustee or facility agent is not mentioned when a deal works. It becomes the most important player when trouble hits. This is why global financial centres tend to build focussed businesses around bond and security trusteeship, facility and collateral agency, escrow, and calculation. They offer continuity even when lenders, investors and market situations change.
Major financial hubs such as London, Luxembourg, Singapore, and Hong Kong did not become durable financial centres by attracting banks and listings alone. They built multiple institutions that helped move and protect capital.
India has more than a starting point
Today, Indian trustee companies deal with complex debentures, security structures, escrows, and financings. It also has a slew of professionals working on global transactions. India also offers competitive costs and a massive talent pool. That said, competence in domestic markets does not guarantee international acceptance. As mentioned earlier, despite their expertise and relationships with borrowers, most companies still look offshore. An overseas investor will ask if the trustee's authority is recognised in each jurisdiction, whether security can be enforced, and whether the institution has adequate capital, insurance and operational durability.
The key question is how will the institution behave when the deal is distressed? A licence permits an activity. It does not offer credibility. That is built mandate by mandate, which is why incumbent trustees have accumulated a track record and Indian institutions have not yet had the chance to build one globally.
What global standing requires
That track record is built on a few tests, and any Indian institution seeking a global mandate will face them. Cross-border legal recognition must be enforced. Insolvency and enforcement rules differ across jurisdictions. Sanctions, anti-money-laundering obligations and data requirements can travel across borders. A trustee may receive conflicting instructions from several jurisdictions, even as the underlying asset sits in another.
Independence will also be scrutinised. A financial group may lend, hold accounts, provide escrow services and act as trustee in the same transaction. International parties expect conflicts to be managed to standards they already recognise. People matter too; much depends on why a clause was negotiated and how it operates years later.
These issues tend to protect global trustees. The key is repeated acceptance by arrangers, investors, law firms, and regulators, built over decades.
This is where the GIFT IFSC changes things. It offers India an international financial jurisdiction where cross-border banking, funds, capital markets and leasing can be developed under a unified regulator. The IFSC has 35 banks with combined assets exceeding $100 billion, and companies have raised more than $65 billion through bond issuances. The IFSC framework also recognises trusteeship and facility-agent functions.
The opportunity should be approached piecemeal. For instance, aircraft leasing is a useful case: an asset owned in one jurisdiction, financed from another and enforced in a third. It needs security and agencies that work across all of them. The competence built here can be used for ship leasing and structured finance. Foreign-currency bonds offer another route. Selected mandates could let a GIFT-based trustee work together with established international participants and build a track record.
Moreover, digital bonds and tokenised assets make this more urgent. Technology does not decide who represents investors after a default, or acts when a digital record and a legal right tend to change.
An Indian trustee appointed where neither the borrower, the asset nor the investors are Indian would mean something more. India would no longer be bringing trusteeship home. It would be exporting trust.
About the Author: Rahul Choudhary is the MD & CEO of Axis Trustee Services Limited.
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