Keki Mistry, a non-executive director of HDFC Bank, said the Indian banking system is attractive to foreign investors.
This sentiment comes as India seeks to deepen its financial integration with global markets. Increased foreign investment in the banking sector can provide the capital necessary for expansion and modernization of financial infrastructure.
Speaking during the fourth Edition of the Banking Transformation Summit in July, Mistry said the attractiveness of the Indian banking system to foreigners is tremendous [1]. He said he expects to see more strategic deals happening in the sector [1].
This optimism aligns with recent data regarding foreign portfolio investment. Foreign investors have purchased $7.7 billion [2] in Indian debt in 2026, an increase from the $6.6 billion [2] purchased in 2025. This surge in debt acquisition follows India's inclusion in the Bloomberg Global Aggregate Bond Index [2].
However, the appetite for Indian assets remains split between debt and equity. While bond purchases have risen, foreign investors have sold $27.6 billion [2] in Indian equities in 2026.
Mistry said the ongoing appeal of the banking system is due to strong fundamentals [1]. The combination of these internal strengths and the external catalyst of global index inclusion has created a favorable environment for strategic partnerships [1], [2].
“The attractiveness of the Indian banking system to foreigners is tremendous.”
The divergence between equity sell-offs and debt purchases suggests that foreign investors are pivoting toward lower-risk Indian assets. The inclusion in the Bloomberg Global Aggregate Bond Index mandates certain holdings for global fund managers, creating a structural floor for demand in Indian debt regardless of equity market volatility.
