Stars Align for India Bonds After First Yearly Gain Since 2020.

Indian sovereign bonds had their best annual performance in three years and are expected to continue gaining due to their upcoming inclusion in a global bond index, which is anticipated to attract significant foreign investment. Foreigners bought $8.4 billion of local bonds last year, the highest amount in six years, with particular interest in the index-eligible Fully Accessible Route (FAR) bonds. The Reserve Bank of India is also expected to cut interest rates earlier than expected, which could further stimulate bond investments. Additionally, the upcoming federal budget is expected to be fiscally conservative, easing concerns over excessive spending. The demand for bonds is projected to exceed supply in the coming fiscal year, driven by long-term investors such as insurers and pension companies. [Extracted from the article]