The Bharat Fund: Why India's Time for a Sovereign Wealth Fund Has Come

India's government holds listed equity worth roughly ₹44 trillion — approximately $495 billion at current valuations. These stakes in public sector enterprises sit scattered across twelve different ministries, managed by bureaucrats whose primary mandate is sector policy, not investment returns. Oil companies sit under the Ministry of Petroleum. Banks and insurers answer to the Ministry of Finance. Power firms report to the Ministry of Power. There is no unified oversight, no professional fund management, no coherent return optimisation — and no strategic deployment of what is, by any measure, one of the largest pools of state-owned assets in the world.

The proposed Bharat Sovereign Wealth Fund — with a mooted initial corpus of $50 billion — would change that. The idea, long debated and repeatedly deferred, has returned to active policy consideration in 2026 with new urgency and new strategic logic. The question is no longer whether India needs a sovereign wealth fund. The question is what kind, and how to build it right.

Why Now

The case for a Bharat SWF rests on three converging realities that did not exist — or did not exist with the same force — in earlier iterations of this debate.

The first is scale. India is now a $4 trillion economy targeting $10 trillion by 2035. At that scale, the fragmented, ministry-by-ministry management of public sector assets is not merely inefficient — it is strategically wasteful. India's government listed equity holdings alone, if pooled under one professionally managed fund, would instantly rank among the top 10 sovereign wealth funds in the world. That is not a marginal opportunity. It is a transformational one.

The second is the strategic resource imperative. India's ambitions in semiconductors, critical minerals, rare earths, green hydrogen, and clean energy all require securing upstream supply chains that are increasingly contested by China. Unlike oil-rich Gulf states that built their SWFs from commodity surpluses, India's strategic requirement is different — it needs a vehicle to make long-term, patient, strategic investments in resource assets, technology partnerships, and infrastructure corridors that pure commercial capital will not fund on the timelines India needs. A well-designed SWF gives India that vehicle.

The third is geopolitical positioning. A Bharat SWF would place India alongside Singapore, Norway, the UAE, and other economies that deploy national savings into global markets and strengthen geopolitical influence. In a world where sovereign wealth funds have become instruments of strategic statecraft — where Abu Dhabi's ADIA, Singapore's Temasek, and Saudi Arabia's PIF are as much geopolitical actors as financial ones — India's absence from that league diminishes its capacity to participate in the highest-stakes investment diplomacy of the coming decades.

The Temasek Model — And Why It Fits India

The most instructive precedent for India is not Norway's oil-funded Government Pension Fund or Abu Dhabi's commodity-surplus ADIA. It is Singapore's Temasek — a fund that began not with oil revenues or trade surpluses, but with exactly the kind of assets India already has.

Temasek wasn't built on oil or foreign exchange reserves. It began when Singapore transferred ownership of companies like Singtel, Singapore Airlines, and DBS Bank into a single investment holding company. Temasek then diversified globally, reinvesting profits and expanding beyond national borders — pioneering the "state-as-shareholder" model and proving that public ownership and commercial performance can go hand in hand.

India's situation maps directly onto this model. The government holds stakes in ONGC, NTPC, BEL, BHEL, SBI, Coal India, and dozens of other enterprises — strategic companies with real earnings, real assets, and real growth potential. A 2% divestment from government equity alone could generate over $10 billion annually, reducing India's fiscal deficit meaningfully. Pooling these stakes under a single professionally managed entity — governed by independent boards, subject to transparent reporting, and mandated to deliver long-term commercial returns — would simultaneously improve the governance of India's public sector enterprises, reduce fiscal fragmentation, and create a vehicle for strategic global investment.

At present, dividends and disinvestment proceeds flow directly into the central treasury. Ministries are designed to set policy, not to run companies or make investment decisions. In today's complex business world, they are simply not equipped to play fund manager. A Bharat SWF ends that structural misalignment.

What the Fund Should Do — And What It Should Not

A Bharat SWF will only succeed if its mandate is precisely designed. Two distinct but complementary objectives should define it.

The first is domestic PSU governance and return optimisation. The fund should consolidate India's public sector equity holdings, professionalise their management, and deliver better returns for the Indian state — freeing India's Finance Ministry from the impossible dual mandate of fiscal manager and portfolio investor. This is the Temasek function: making the government a smarter owner of the companies it already owns.

The second is strategic global investment. India needs patient, long-term capital deployed in critical minerals in Africa and Latin America, semiconductor supply chains in Southeast Asia, green hydrogen infrastructure in the Middle East, and technology partnerships with firms that require a sovereign counterpart. These are investments that commercial funds will not make on the timelines or with the risk tolerance India needs. A sovereign vehicle with a clear strategic mandate fills this gap — and gives India the same tool that China's CIC, the UAE's Mubadala, and Saudi Arabia's PIF have been deploying for years to lock in resource access and build geopolitical leverage.

What the Bharat SWF should not do is replicate the LIC model — deploying policyholder or public money to bail out struggling PSUs, rescue stalled IPOs, or act as a backstop for political disinvestment decisions. LIC already behaves like a de facto sovereign wealth fund, but without the transparency, safeguards, or governance architecture that such a role demands. The Bharat SWF must be a genuinely independent institution — governed by the Santiago Principles, subject to parliamentary oversight, and insulated from short-term fiscal pressures.

Addressing the Sceptics

The objections to an Indian SWF are real and deserve honest engagement. India runs a persistent current account deficit — unlike the commodity exporters whose surpluses typically capitalise SWFs. India has pressing domestic investment needs that arguably take priority over outward strategic investing. And building the institutional capability to manage a world-class sovereign fund takes time.

These concerns are valid. But they are arguments for designing the fund carefully, not for not building it. India's forex reserves have crossed $650 billion — a level that comfortably supports the current account buffer without requiring every dollar to sit in US Treasuries earning sub-optimal returns. The NIIF, India's existing quasi-sovereign vehicle, has demonstrated that professional management of public capital is achievable in the Indian institutional context. NIIF is already seeking to double its assets under management to $10 billion, fuelled by surging demand for urban infrastructure. The Bharat SWF builds on this foundation at a scale commensurate with India's ambitions.

The institutional capability argument is addressed by design, not deferral. Starting with a focused mandate — PSU consolidation and a limited set of strategic outward investments in critical minerals and technology — allows the fund to build its governance, talent, and track record before expanding its scope. Temasek took decades to become what it is. India does not have decades. But it has the talent, the institutional precedent, and the strategic necessity to build faster than Singapore did in 1975.

The Strategic Imperative

India is competing in a world where sovereign capital is a geopolitical instrument. China has deployed its sovereign funds to lock up lithium in Chile, cobalt in the DRC, and rare earths across Africa. The UAE's Mubadala has built a global technology and clean energy portfolio that gives Abu Dhabi strategic leverage far beyond its geographic size. Saudi Arabia's PIF is reshaping entire industries — from electric vehicles to entertainment — as an instrument of Vision 2030.

India, with the world's fifth-largest economy and the largest pool of state-owned equity outside China, has the assets to play in this league. What it has lacked is the institutional vehicle. The Bharat Sovereign Wealth Fund, designed with the right mandate, the right governance, and the right strategic ambition, gives India exactly that. The case is no longer theoretical. It is urgent.

The Hind covers policy, power, and strategic affairs from India's perspective. Views expressed are analytical and editorial.