India might have seen a local government sell masala bonds offshore, but there is no rush of issuers as investors are unlikely to take on the bets at a time when US-China trade tensions are flaring up.

Kerala Infrastructure Investment Fund Board will list ₹2,150 crore ($305 million) of Masala bonds on the London Stock Exchange on Friday after pricing the five-year notes in March. The funding arm of the state chose to tap the tiny Masala debt market, which has been struggling since its emergence four years back.

“While other state entities may follow Kerala, they will have to wait for the markets to stabilize from the current US-China trade tensions,” said Bharat Shettigar, Head of Asia ex-China corporate credit research at Standard Chartered Bank. “I do not see a large amount of issuance from similar entities as overall demand for Masala bonds is a bit patchy.”

Kerala plans to spend ₹50,000 crore on infrastructure projects over the next five years, according to an investor presentation posted on its website. The issuance was jointly led by Axis Bank and Standard Chartered Bank, and is guaranteed by the Kerala state.

Other states have huge financing requirements for building infrastructure, and selling offshore debt helps diversify funding by tapping large pools of available funds, Standard Chartereds Shettigar said.