A $4 billion fund will be set up by India to backstop the corporate debt market.

According to an SBI Mutual Fund official who spoke to Reuters, India is establishing a fund worth Rs 33,000 crore ($4 billion) to offer liquidity to its corporate debt market at times of stress.

The backstop fund might enter the market in times of crisis and purchase relatively scarce investment grade bonds.

The source stated that although the fund is minor in comparison to the $471 billion Indian corporate bond market, it may eventually grow in size.