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New DelhiIndia’s bond market is performing tremendously these days. The reason for this is the steady inflation in the country and the increasing expectation of interest rates from the Reserve Bank of India (RBI). Global brokerage firm Jefferies has said in its recent report that due to these reasons, India’s bonds have now become more attractive and investors’ trends are moving rapidly.
India’s average inflation rate was 4.6 percent in the last financial year 2023-24. But in April 2025 it fell to 3.2 percent, which is the lowest level after July 2019. This decline suggests that prices are controlled in the country and people are getting less burden on their pockets. Jefferies says that now the Reserve Bank has a big opportunity to cut interest rates, which can speed up economic growth.
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50 basis point cut in interest rates so far
The Reserve Bank has so far cut 50 basis points i.e. 0.50 percent. Jefferies hopes that by the end of 2025, the RBI can cut 75 basis points. This will increase the availability of capital in the market and will encourage investment. This change can provide great benefit to those who invest for a long time, because they are getting more profits from India’s government bonds. The report said that India’s bonds are giving better returns than developed countries like America.
51% better returns from American bonds
According to Jefferies, since April 2020, India’s 10 -year -old government bonds have given 51 percent more returns than the US 10 -year Treasury Bond in terms of dollars. This difference shows how strong India’s bond market has become internationally.
India’s 15 -year bond is the biggest holding
Jefferies tracks a global sovereign bond portfolio with 15 years of government bonding of India. This is 25 percent of the portfolio. This bond is currently getting 6.38 percent interest on this bond, which shows the trust of investors in the Indian fixed income market. This situation suggests that now investors are shifting to emerging markets like India rather than government bonds in G7 countries like America and Europe.
Why are Indian bonds liked?
Jefferies said that investment in India’s bonds is increasing because inflation is low here, interest rates are attractive and the rupee situation also remains strong. Apart from this, India’s economy is stable and there is a chance of high yields here. The ups and downs in the bonds of G7 countries have become very high, due to which international investors are now looking for a stable and reliable option. India is fulfilling this need well.
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India becomes trusted destination of investors
The report of Jefferies indicates that the financial system of the world is changing. Moving out of traditional investment markets like America and Europe, investors are now adopting new options like India. Low inflation, potential interest deduction and stable currency are making India’s bonds even more attractive to global investors. India is now not only an emerging economy, but has also become a strong and reliable investment market.
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