Tourism Bonds to Debut With Nathdwara as Pilot

Mumbai | July 9, 2026 

India is introducing tourism bonds as a specialised financial instrument to fund the development of major tourist destinations. The move builds on the established model of temple bonds used in Ujjain, which allowed urban local bodies to tap public capital for infrastructure development. Nathdwara, Rajasthan, has been identified as the pilot location, with the project focused on enhancing facilities around key pilgrimage and heritage sites. 

HUDCO’s Role as Financier and Advisor 

Housing and Urban Development Corporation is playing a central role as both financier and strategic advisor for these bond issues. The company is working directly with the Rajasthan government to help local bodies structure their projects to be bankable, meaning the projects must demonstrate a clear path toward generating revenue to repay bondholders. Through its Urban Invest Window programme, HUDCO is assisting local government entities with asset mapping, project report preparation and financial structuring. 

Municipal Bond Market Growth 

This initiative is part of a broader trend to deepen the municipal bond market in India. To date, approximately 20 urban local bodies have issued bonds, with 50 to 70 more expected to follow. As local bodies move towards market-based financing, entering the bond market requires them to maintain clear records of income-generating activities and demonstrate financial transparency to attract investors. 

HUDCO’s Funding Diversification 

HUDCO is also expanding its funding and investment scope beyond traditional infrastructure lending. In addition to tourism-focused bonds, the company is preparing to launch social impact bonds later this year, in line with its strategy to diversify its portfolio. HUDCO has also been managing its own borrowing costs, having secured $1 billion in dollar-denominated loans, and is evaluating the Reserve Bank of India’s forex swap facility to keep its borrowing competitive. 

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