The yield on India’s 10-year G-Sec fell to around 6.72%, retreating from a year-high, as a trade agreement with the United States improved sentiment across domestic financial markets. President Donald Trump stated that the US would roll back punitive tariffs on India following an understanding with Prime Minister Narendra Modi, including measures related to India’s Russian oil purchases. US tariffs on Indian goods will be cut to 18%, and an additional duty on crude imports will be removed. Analysts expect the trade deal to weigh more heavily on 10-year and longer-dated yields, with the rupee likely to strengthen. The agreement is also anticipated to attract foreign capital, as a firmer currency would make local bonds more appealing despite record-high government borrowing.
