The paper further discusses several aspects of investment risks in India and points out how investors can implement certain useful techniques. Finally, it offers some suggestions to overcome these challenges.The long-term financing of various types of infrastructure, industrial and public service projects are usually referred to project finance. In recent times, it has funded many large-scale natural resource projects as well as a number of high-profile corporate projects. However, a similar type of financing scheme is recorded in the history of ancient Greece and Rome, the modern trend of project finance developed in the last forty years. Basically, this is an innovative and timely financing system.The non-recourse or limited recourse loans of project finance are mainly based upon the estimated cash flow of the project. The key to project finance is in the precise forecasting of cash flows (Ghersiy, 5). The assets, rights and interests of project secure the loan amount in such cases of debt. And repayment of loan exclusively depends on the project’s cash flow. The balance sheet and creditworthiness of the project sponsors are secondary in it.Unlike conventional financing methods, project financing is unique. Since project financing enhances the values of some of these projects by permitting higher optimal leverage than with conventional financing (Shah Thakor, 212). The borrowing party has limited liability in some risky and expensive projects. Such cases are secured by a surety from sponsors. Therefore this is also known as limited recourse financing.There are many huge industrial and infrastructural projects, as already carried out successfully for certain types of project i.e. infrastructure development, mining, highways, railways, pipelines, power stations, etc.