Q: How do you see IFC’s India portfolio performing? What is the plan going ahead?
A: India is now IFC’s largest portfolio. Last year, we committed $5.4 billion, including $3.4 in mobilisation. This year (FY26, ending June 2026), we are looking at $7 billion. But the aspiration is to take it to around $10 billion by 2030. If we increase our commitment by about $1 billion a year, we should be able to do it. And, this is consistent with India’s economic growth of around 6.4%. An economy of this size, growing at this speed, requires us to increase both our ambition and commitment. We would be doing this through our own resources and private capital mobilisation, and I believe India will continue to remain IFC’s largest portfolio going forward.
Q: What are the key focus areas for IFC in the country?
A: We are looking to work more with states as part of the World Bank Group’s urban transformation agenda. On each of my visits, I make it a point of going beyond the capital city and include a visit to heads of state to understand their needs and how we can support them.
Q: Does IFC usually work with regions, provinces, or subnational entities in other countries as well?
A: When I was at IBRD (the International Bank for Reconstruction and Development), the public part of the World Bank Group, I covered Brazil, which at that time was the Bank’s largest portfolio. Much of that portfolio was subnational. We conduct fiscal analysis of a state or municipality, look at their credit rating, and support them in strengthening it to get them ready to access markets. In India, we have just announced our first municipal financing with Greater Visakhapatnam Municipal Corporation. This is the first investment by a development finance institution in a city, without a sovereign guarantee. This demonstrates the World Bank Group’s commitment to helping cities leverage limited public funds to attract global private investment. What India is pioneering today can inspire cities everywhere to build cleaner, more resilient, and future-ready urban spaces.
Q: Which sectors in India do you find particularly promising? And which have given you good returns over the years?
A: The financial sector, not just as an industry in itself, but as a channel through which we reach other targeted areas. Infrastructure and renewables are very attractive for direct investment. Real estate has been another strong area. We’ve invested across the clean energy supply chain, and mobility is a major focus. For example, I just signed two investments on e-buses during this visit. We are also investing in batteries and supporting everything that contributes to greener mobility. Beyond that, we are looking at transmission lines. Green energy and greening the economy remain central to our work. Housing is another big area-IFC was one of the first investors in HDFC in 1978. Logistics and highways, which enhance productivity and connectivity, are also priorities. IFC is also looking to further extend support to the MSME sector which is central to India’s development agenda and our own IFC 2030 strategy. We work with companies such as Shriram Finance to boost access to finance in underserved low-income areas. IFC also works with Bajaj Finance to expand access to clean mobility and sustainable consumer goods. Going forward, I want to push more in building EV supply chains and greening batteries. If Indian companies show interest in investing abroad in critical minerals, we can support them as well. So, it’s not just about investing in India, but also helping Indian companies access other markets.
Q: In many parts of the world, including India, we are staring at the spectre of a trade war and consequent disruption of supply chains. How do you see this impacting growth and countries such as India?
A: Trade uncertainty has weighed in on global growth. The World Bank projects global growth at just 2.3% in 2025 – well below historical averages – marking the slowest seven-year stretch since the 1960s. We hope this uncertainty will ease. If we look at more recent developments, the Production Linked Incentive (PLI) scheme in India was conceived before some of the most recent shocks. This shows that countries are conscious that they need to diversify supply chains. Covid, also, was a big shock. It made countries realise their vulnerability. And The 2008 crisis disrupted finance… I think that’s when the leadership in many countries started the conversation on diversification of supply chains.
Q: India has just unveiled a GST recast. What more needs to be done to shield the economy from geo-economic uncertainties?
A: The Indian economy is very resilient by nature. The DNA of the local private sector exudes confidence that “we can handle anything.” In terms of what comes next, I think that continuing to simplify the way people do business should continue. UPI is a good example, and the move towards a dual GST rate is another step in the right direction. Strengthening subnational entities is also very important in a country of India’s scale.
Q: Multilateral institutions have long played a strong role in the global system. But now we see countries turning more to bilateral arrangements and expressing frustration with multilateral bodies. How do you view this shift?
A: In my personal view, we are in a period where the equilibrium has not yet been found. The shocks we face today are diverse, often uncorrelated, and come from many directions. For example, five years ago none could have imagined what has been happening in Ukraine, Gaza, Sudan. Any one of these crises would have been destabilising on their own in earlier times. Now they are happening simultaneously. You have a multiplicity of vectors.
So, the type of shocks and sources of uncertainty are diverse. This makes it difficult to think about the world and state of equilibrium. That’s why I think patience is needed. But it also means that institutions like ours must constantly reassess their role and relevance. We have to ask ourselves: are we meeting people’s expectations? Are we adapting to trends such as localising labour-intensive parts of supply chains? The free-trade model created wealth but also raised distributional issues in some countries.
Q: Have these global developments led to any change in IFC’s investment strategy?
A: Supply chain resilience is a key concern. Everyone is thinking of sub-regional or local supply chains. Energy, safety and security drive decisions around supply chains. Countries want to secure their supply chains, particularly for energy, and to do it in a sustainable way. Energy security and green energy are going to drive many investment decisions. We also look at every investment through the lens of job creation. With migration pressures and political sensitivities, it is essential to generate jobs locally, especially in non-tradable sectors. This is going to be an increasingly important part of IFC’s mandate.
Q: Politically, we are in a space where we are seeing politicians winning elections on the ticket that globalisation is bad. Is that something that concerns you? Do you see this as a long-term risk to the global economy?
A: I think you are right in raising this issue. What we are seeing may be a correction phase when things turn to the next level before returning to equilibrium. I am not so sure if this shift is sustainable. It will depend a lot on each country’s circumstances, history and economic challenges it faces.
Q: Have there been any changes in IFC’s investment strategy after the MDB reforms?
A: Ajay Banga (World Bank President), who came from MasterCard, brought valuable feedback from the capital markets about how our institution is perceived. Many of the changes he has asked us to make are linked to his experience . What we are doing now is simplifying things from the client’s perspective. We are working to better leverage the different arms of the World Bank Group-IBRD, IFC, MIGA, and ICSID (conflict resolution entity).
The idea is not to come only with solutions from the private sector side, but to create comprehensive packages that combine the strengths of different institutions within the Group. On the back-office side, we are also integrating functions like treasury and bond issuance. At IFC specifically, we have been reviewing our own strategy and focusing on a few elements. First, equity. In many developing countries, firms are over-leveraged-they have debt but lack equity. Providing equity can make a transformative difference. Second, (there’s) policy predictability. What private investors want above all is stability and clarity in policy. Through the Private Sector Investment Lab (set up by Ajay Banga to identify and address investment barriers in emerging markets and developing economies, in collaboration with global CEOs to pinpoint challenges such as regulatory uncertainty, political risk, and lack of bankable projects) and our country private sector diagnostics, we are systematically identifying the reforms that matter most to investors and integrating these into our strategies.
Third, addressing maturity and currency mismatches. Private firms in developing economies often face two problems: short maturities and currency risk. Both undermine competitiveness. We are extending maturities-recently up to 22-23 years, which was not common before-and scaling up local-currency financing (40% of our total financing in FY25)
Fourth, support for MSMEs. Expanding access to finance for micro, small, and medium enterprises is central. We are working with commercial banks and non-banking financial institutions, using credit lines and other instruments, to expand this support.
Fifth, guarantees. In the past, guarantees were fragmented across IFC, IBRD, and MIGA. We are moving toward a one-stop shop model, with MIGA taking the lead, while standardising and innovating to make guarantees more effective.
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