India: Debt Capital Markets

The September 2026 edition of Fox & Mandal's newsletter examines MCA’s FAQs on foreign company registration; proposed amendments to the NBFC credit facilities framework; expansion of OBPP offerings; operationalisation of FDI in inventory-based cross-border e-commerce; Demat 2.0 for tokenisation of corporate bonds; NHAI Policy Circular on real-time blacklisting and non-performance records; and other changes in India's corporate, capital markets, infrastructure, and banking sectors.

Foreign Portfolio Investors (FPIs) form a critical channel for overseas capital into India’s equity, debt, and increasingly commodity markets

Recovering an unpaid invoice from an Indian company need not mean years in an ordinary civil suit. Indian law offers several faster routes: insolvency proceedings under the Insolvency and Bankruptcy Code, 2016 (IBC), summary procedures in the commercial courts, a statutory regime for micro and small suppliers, and arbitration. Foreign creditors have two further options: executing a judgment from their home court, or enforcing a foreign arbitral award. The right choice turns on three questions. Is the debt genuinely disputed? Where are the debtor’s assets? What does the contract say?

In a significant move to deepen foreign participation in India’s sovereign debt market, the Government of India promulgated the Income-tax (Amendment) Ordinance, 2026 on 5 June 20261, introducing a comprehensive tax exemption for eligible foreign investors investing in Government securities. Effective retrospectively from 1 April 2026, the Ordinance exempts specified income arising from Government securities from withholding tax and long-term capital gains tax, thereby addressing one of the principal tax-related barriers to foreign investment in Indian debt markets.

The Supreme Court, in Anjani Technoplast Ltd. v. Shubh Gautam (2026 INSC 410) ('Anjani Technoplast'), has set aside the admission of a Section 7 petition filed by a decree holder against a solvent and functioning company. A Bench of P.S. Narasimha and Alok Aradhe, JJ. held that a decree holder who has the full machinery of civil execution available to him cannot invoke the insolvency jurisdiction as a substitute for execution proceedings.

Stamp duty is one of the oldest forms of fiscal legislation in India, yet it remains one of the most frequently underestimated sources of risk in corporate and commercial transactions. Parties tend to focus on the substantive commercial terms, tax implications, and regulatory approvals, relegating stamp duty analysis to the execution stage.

In the present matter, the date of default for the debt availed by the Corporate Debtor (“CD”) from Dewan Housing Finance Limited (“DHFL”) was 06.12.2016. However, DHFL itself was admitted into CIRP on 03.12.2019.

The Ministry of Finance (“MoF”) by Notification dated 01.05.2026, notified the Foreign Exchange Management (Non-debt Instruments) (Amendment) Rules, 2026 (“Amendment Rules 2026”) to further amend the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 (“Principal Rules 2019”).

The National Company Law Appellate Tribunal, Principal Bench, New Delhi (“NCLAT”), In the case of Vistra ITCL (India) Limited vs. Vithal Madhukar Dahake and Ors.1, has considered whether a third-party mortgagor, which created security over its assets for the debt of another entity, could be treated as giving rise to a ‘financial debt’ under the Insolvency and Bankruptcy Code, 2016 (“IBC”). The appeal arose from an order of the National Company Law Tribunal, Mumbai (“NCLT”).