StatsGuru: Taking stock of Indian debt markets and what lies ahead

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Are Indian debt markets poised to become significantly more attractive? As Table 1 shows, yields on government debt in mature markets have declined sharply - making the spread with Indian debt more noticeable. Foreign investors will be attracted to Indian debt if they can be assured that the rupee will be stable and retain value - as Table 2 shows, that will be a tough call to make. However, as Table 3 shows, looking at 2014 the rupee has retained most strength against the dollar.

Table 4 shows that Indian equity has gained much value this year, as opposed to alternative forms of investment. This too has led to suggestions that future inflows may be into debt, if Indian equity has become expensive over 2014. Certainly, Tables 5 and 6 show that foreign institutional investors have switched to debt over equity of late.