Budget 2019: Why India is launching its first ever sovereign bond

While sovereign bonds may help India get loans overseas at lower interest rates they are susceptible to exchange rate fluctuations

In her maiden Budget speech, finance minister Nirmala Sitharaman indicated that the Modi government wanted to borrow more from abroad. Sitharaman said, “The Government would start raising a part of its gross borrowing programme in external markets in external currencies. This will also have beneficial impact on demand situation for the government securities in domestic market.” During the post-budget media interaction, bureaucrats of the finance ministry hinted that India would soon be launching sovereign bonds without giving further details.