Why global funds are once again warming up to India's sovereign bonds

Overseas holdings have risen Rs 80.1 billion ($1.1 billion) in the previous three weeks, data from the Clearing Corporation of India Ltd. show

Global funds are warming up to India’s sovereign bonds after shunning them for most of this year. Whether the interest will sustain depends on the price of oil, the nation’s top import.

Overseas holdings have risen 80.1 billion rupees ($1.1 billion) in the previous three weeks, data from the Clearing Corporation of India Ltd. show. The inflows have coincided with a swift drop in crude costs and debt-buying support from the central bank, helping put the benchmark 10-year bonds on course for their first quarterly gain in more than a year.

“With the U.S. mid-term elections over, oil prices weakening and the