Introduction Did you know that large portions of contractors’ working capital in India are locked away as collateral for bank guarantees (BGs)? With the country’s massive infrastructure pipeline and a drive to include more MSMEs, a new tool is coming into focus: surety bonds India . These offer a smarter alternative for guarantee obligations and could reshape how infrastructure and contracting work in India. The Bank Guarantee Challenge in India High Collateral Requirements T

Introduction The landscape of infrastructure financing in India is undergoing a quiet yet significant shift. For years, contractors and project developers have relied almost entirely on bank guarantees to meet contractual obligations. But that is changing. With IRDAI’s new reforms enabling insurance companies to issue surety bonds, we are seeing a new mechanism designed to improve liquidity, widen access, and unlock project potential. What is the Reform? IRDAI introduced the