India is seeking financing from the World Bank and the Asian Development Bank (ADB) to mobilise about $ 2.5 billion for urban infrastructure and job creation as subsidy costs linked to higher oil prices have widened the budget gap. The proposed package would see the World Bank provide roughly $one point five bn and the ADB about $one bn, according to sources who asked not to be identified. The moves form part of a push to identify fresh financing after the Middle East conflict constrained New Delhi’s capacity to increase domestic spending.

Officials said the funding is intended to support urban renewal, public services and employment in cities while complementing existing central programmes aimed at infrastructural modernisation. The latest loans would be folded into the World Bank Group commitment to provide about eight to ten billion in annual financing over a five-year span, sources noted. Announcements were expected within the next two months, reflecting accelerated talks to tap unused credit lines.

The World Bank indicated it was in discussions with the government on possible support for structural reforms designed to boost private sector employment and growth, while not disclosing a formal loan commitment. The ADB and India’s finance ministry were reported as not having responded to requests for comment, and the lenders’ prior engagement with India underpins the current negotiations. The ADB has previously committed 683 public sector loans, grants and technical assistance totalling 63.8 bn to India to end December.

India remains the World Bank Group’s largest client, with almost 37 bn in commitments from the International Bank for Reconstruction and Development and the International Finance Corporation, underscoring deep bilateral engagement. New Delhi’s ruling administration is seeking to upgrade ageing infrastructure and accelerate urban projects that are central to its objective of becoming a developed economy by 2047. The proposed external financing would bolster capital expenditure without immediate further strain on public finances.