The Indian debt and bond market remains robust despite ongoing global geopolitical uncertainties and external shocks, which have led to supply chain disruptions and challenges for exports. Mehul Pandya, Managing Director and Group CEO of CareEdge Group, shared these insights during the CareEdge Debt Market Summit 2026, highlighting the resilience of domestic corporate balance sheets, which have been largely deleveraged.
Pandya stated that the corporate landscape is exhibiting greater strength than in previous crisis cycles, which mitigates the risk of widespread financial distress. He explained, “The overall debt market situation in the country, because of the deleveraged corporate balance sheets, we are not at a stage where say 7-8 years back we were, that any volatility in the cash flows could have actually led to a significantly large number of defaults and stresses on the bank’s balance sheet.” He acknowledged, however, that current volatility is affecting both sides of the market.
The ongoing crisis in West Asia has had repercussions for both export-driven sectors and domestic supply chains. Although recent international announcements suggest potential stabilization, the timeline for normalization remains uncertain. “Not only are the export-driven sectors impacted because of the disruptions regarding their finished products, but at the same time, the supply chains of the other players are also getting disrupted because of this entire situation,” Pandya noted, emphasizing the need to see how quickly normalcy can be restored.
Moreover, he addressed the importance of recent pronouncements, stating, “If it actually fructifies to the way in which they have been positioned, I think that would be good, but that would still leave out the question in terms of how soon the supply chains and export markets get reinstated.” He cautioned that even if hostilities were to cease immediately, global stability would not return instantaneously. “We would be having some period of where the uncertainties would still be there,” he added.
Pandya also reported a shift in CareEdge’s credit ratio—measuring upgrades against downgrades—during the second half of the fiscal year 2026, noting that this period included only one month of direct disruption. He indicated that the first quarter of the current financial year would be crucial for evaluating long-term debt servicing capabilities and funding patterns.
Regarding the economic outlook, CareEdge projects India’s GDP growth for the fiscal year 2026-27 at approximately 6.7%, contingent on international crude oil prices averaging USD 98 per barrel. Continued hostilities or a subpar monsoon season could result in inflationary pressures, which might drive up borrowing costs for corporations and limit medium-term growth prospects.
Published on May 26, 2026.
