Indian Bond Market

The surge follows the government's June 5 decision to cut taxes on capital gains and interest income on bonds, removing one of the last barriers for global funds investing in India's sovereign debt

Wide variance in gilt, dynamic funds' duration positioning in recent past

₹27K cr debt haul this week; pipeline holds ₹13K cr for next week

Seeking to shore up the rupee ‌and interest in bonds, India last week announced ​tax cuts for overseas bond investors ​and a host of measures aimed at boosting inflows and improving market access

FIIs are subjected to a 12.5 per cent LTCG on listed shares and bonds held for over 12-months, and a 20 per cent withholding tax on interest from government bonds

The move underscores the RBI's push to deepen liquidity in sovereign debt, a priority that Governor Sanjay Malhotra highlighted this month

The 10-year bond yield rose as much as eight basis points to 6.78 per cent, the highest since Jan. 17, 2025

No trades have been executed on a portal set up in July 2024 by the nation's sovereign debt clearing house, as market players await clarity

Despite a cumulative 125 basis point cut in the repo rate and record liquidity injections of about Rs 6.6 trillion during the current financial year, yields remained elevated

The rise, driven by large debt maturities of about ₹5.5 trillion, comes as heavy state government issuance pushes up yields

Indian government bond yields hit a 10-month high as rising US Treasury yields and cautious sentiment kept pressure on the domestic debt market

Heavy state government borrowing is expected to keep bond yields elevated in 2026, while the rupee, after its worst Asian performance in 2025, is seen trading in a narrow range

States are aiming to raise more than ₹33,200 crore, 25 per cent higher than the planned calendar, while Power Finance Corp is eyeing ₹6,000 crore and Bank of India plans to raise ₹10,000 crore

Axis AMC expects markets to shift towards a 'lower-for-longer' rate phase as tighter liquidity conditions set in

Alongside fiscal concerns, pension funds and insurers have shunned bonds in favour of equities, while large banks have slowed purchases amid mark-to-market losses on existing bond holdings

Fears of a widening deficit have pushed up the benchmark yield by 18 basis points this month, with the bulk of that rise coming last week

The approach to managing liquidity and communication policy is yet another manifestation of how the central bank has taken a fresh view on the issue

Jio Finance to launch its first bond issue on May 14 with Rs 1,000 crore target and 7.19 per cent expected coupon amid improved liquidity and rate cut outlook

Indian states raised Rs 722.55 billion ($8.43 billion) through a sale of bonds, the biggest amount ever to be borrowed via a single auction

Foreigners bought $1.8 billion of rupee bonds this month so far, already higher than any monthly total since September