India is rapidly establishing itself as a key player in the Asia-Pacific (APAC) real estate private credit market, securing the second position in the region with 36% of regional fundraising between 2020 and 2024. This growth is highlighted in a new report by Knight Frank, which points to India's increasing prominence in alternative lending.
The report, titled "The Rise of Real Estate Credit in Asia-Pacific – Bridging the Gap," indicates a substantial increase in India's private credit assets under management (AUM), from $0.7 billion in 2010 to $17.8 billion in 2023. This exponential growth underscores the market's rapid institutionalization and rising investor confidence. Knight Frank anticipates that India will contribute 20-25% of the region's projected $90-110 billion private credit expansion by 2028. This expansion is fueled by stronger investor appetite, policy reforms, and increased developer demand for non-bank financing.
Several factors contribute to India's rise in the APAC real estate private credit market. Traditional bank lending has become tighter, and regulatory frameworks are evolving, leading developers to seek private credit and alternative lenders. Global private equity firms, family offices, and institutional investors are deploying capital, attracted by favorable returns and rising confidence in India's real estate ecosystem.
Shishir Baijal, Chairman and Managing Director of Knight Frank India, noted that India's emergence as a leading private credit market reflects the country's strong economic fundamentals, regulatory evolution, and deepening institutional participation. He added that developers are increasingly turning to structured and alternative financing to bridge capital gaps and meet rising urban housing demand.
The APAC region raised US$11.2 billion in real estate private credit between 2020 and 2024, marking a 40% increase. Australia leads regional activity, capturing 40% of the funds raised between 2020 and 2024. India follows with 36% of regional fundraising, driven by rapid scale-up and regulatory reforms. South Korea accounts for 11% of the regional total, while Japan represents 5%.
According to the report, India has the highest non-bank lending ratio at 41%, reflecting how quickly private lenders are stepping in to fill financing gaps. Private credit investments in India surged to $9 billion in the first half of 2025, increasing 53% year-on-year and nearly tripling the amount seen in H2 2024. This surge is fueled by mid-sized corporates, real estate developers, and infrastructure players that continue to face limited access to traditional bank lending.
The increasing participation from ultra-high-net-worth individuals and family offices is also a key trend. Private credit providers target returns of 3 to 6.5% above benchmark rates in core strategies, with higher-risk approaches potentially delivering double-digit returns.
