Shunned at home, India's shadow banks are paying more for foreign funds

India’s shadow banks are being forced to go overseas more for money as local lenders balk at extending funds, flagging strains in a key industry for an economy that’s already sputtering.

The country’s non-banking financial companies have raised more than $2 billion of overseas bonds and loans in 2019, a record compared with the same period in previous years, according to data compiled by Bloomberg. The lifeline is welcome, even as it underscores a scramble after a string of defaults by peer IL&FS Group last year made investors wary.

The development comes at a trying time for India’s shadow banks,