With a flourishing social enterprise ecosystem and an appetite among NGOs and policymakers for testing new solutions, India is playing a leading role in its use of innovative financing for development. One such innovative tool is an impact bond, a type of outcome-based financing structure where upfront capital is given to service providers by investors. While evidence on outcome-based financing in education - and impact bonds specifically - is still emerging, there are key lessons to be drawn for the application of such tools to education in India. This study seeks to place two education development impact bonds in the context of the Indian education landscape, and to investigate the overall potential and limitations of outcome-based financing for education in India. While impact bonds are by no means the solution to all the challenges the education system faces, judicious use of the tool has the potential to focus financing on impact, promote effective interventions and service providers, and reinforce the use of data and evidence in decisionmaking.