India’s government has accelerated its drive to sell stakes in state-owned companies, raising over ₹620 billion this year to bolster revenue and address growing fiscal pressures, despite challenging market conditions.
India’s drive to sell down stakes in state-owned companies has gathered pace this year as New Delhi looks for non-debt revenue to help support spending and preserve growth. According to CNBC, the government has already trimmed holdings in 10 public sector firms in 2026 and raised more than ₹620 billion ($6.5 billion), with a recent sale of a 6.5% stake in Life Insurance Corporation of India bringing in $3.3 billion after pricing the shares at a 10% discount. The transaction was oversubscribed, underscoring how determined officials are to keep the programme moving even in subdued markets.
The latest figures suggest the disinvestment push is well ahead of recent years. Prime Database, cited by CNBC, says India has raised nearly ₹270 billion from stake sales in nine state-owned firms this year, excluding LIC, which it described as the strongest haul in more than a decade. The government has now met more than 65% of its annual target of ₹800 billion, a pace that marks a sharp shift from previous years when disinvestment goals were often missed.
Economists say the urgency reflects growing pressure on the fiscal accounts. Anubhuti Sahay of Standard Chartered told CNBC that selling assets is a sensible way to raise funds as the government faces weaker revenue and higher spending commitments, while Alexandra Hermann Prasad of Oxford Economics said the accelerated pace points to “greater fiscal pressure”. Moody’s Ratings told CNBC that higher-than-expected proceeds could ease the strain from subsidy costs and recent policy-related expenses, even as India keeps capital spending elevated.
The broader backdrop is a combination of a widening trade gap, foreign portfolio outflows and a softer currency, all of which complicate the government’s budget arithmetic. For the quarter ending June, India’s goods and services trade deficit stood at $37.4 billion, while the fiscal deficit reached ₹3.1 trillion, or 18.2% of the budget estimate for the financial year ending March 2027, CNBC reported. Indian media outlets have also noted that the sell-down strategy is increasingly being used through offer-for-sale transactions, with fresh minority stake sales under review and the strategic divestment of IDBI Bank moving forward, signalling that the programme is likely to remain central to the government’s financing plans.
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