The yield on India’s 10-year G-Sec held around 6.66%, trading in a tight range, as investors weighed expectations of higher government borrowing in FY 2027. Foreign banks Citi and DBS project net borrowing to rise to around INR 11.8–12 trillion, up from INR 11.4 trillion in FY 2026, while gross issuance is expected to reach record levels of INR 16.5–16.8 trillion. Market participants are also closely watching the government’s FY 2027 budget, set for February 1, for details on borrowing plans, fiscal deficit targets, and the debt-to-GDP ratio, all of which will help determine investor expectations in the bond market. Meanwhile, sentiment was tempered as US Treasury yields eased, partially offsetting yesterday’s sharp gains as traders digested movements in Japanese government bond yields and broader dollar fluctuations.
