Surety Bonds in India â€“ Coverage, Types and Exclusions
Today India is a fast-growing economy on its way to reach $5 trillion of GDP. Consequently, India has been witnessing aggressive infrastructure development in recent years and India is expected to becom the third largest. These infrastructure projects require the contractor to provide financial guarantees to project owners, typically the government.
Traditionally, the contractors have been using bank guarantees to provide financial guarantees. However, the disadvantage being that it locks up significant capital that could have been used for the construction projects.
It is for this purpose that Surety Bond Insurance was recently launched in India. We will discuss the various types of surety bonds available, the process of obtaining and renewing them, and the advantages they offer over bank guarantees.
So, whether you're a seasoned contractor or just starting out, read on to learn more about how surety bonds can help alleviate some of the pain points associated with infrastructure projects in India.