Private credit funds in India are emerging as a key component of the alternative investment landscape, providing non-bank financing to businesses through structured debt solutions. Typically operated via Alternative Investment Funds (AIFs), these funds cater to companies seeking flexible capital for growth, acquisitions, or refinancing, especially where traditional bank lending is limited. Driven by strong investor demand for higher yieldsoften ranging between 14% and 22%and a growing credit gap in sectors like real estate, healthcare, and infrastructure, the market has seen rapid expansion, reaching over $12 billion in investments in 2025.