# Index deferral, global yields to keep foreign bond flows muted: SBI

2026-08-08T13:04:35+00:00 | Business & Economy | Indian Opinion Desk

Corroboration: 1 independent outlet

Foreign investment into Indian government bonds is likely to stay muted despite recent tax relief, according to SBI Funds Management. In its August 2026 market outlook, the fund house said the deferral of India's inclusion in a global bond index will limit incremental foreign portfolio investment. SBI Funds added that global bond yields remain elevated due to weak fiscal conditions and above-target inflation in developed economies. Domestically, the Reserve Bank of India is expected to keep rates on hold, and the rupee's outlook offers little comfort. Any inflows, the report said, would be tactical and guided by currency expectations.

## Coverage

- thehindubusinessline.com <https://www.thehindubusinessline.com/markets/foreign-flows-into-indian-bonds-may-remain-muted-despite-tax-relief-sbi-funds/article71321138.ece>
- ndtvprofit.com <https://www.ndtvprofit.com/markets/no-tax-no-traction-why-foreign-investors-are-still-shying-away-from-indian-bonds-11885034#publisher=newsstand>

Tags: FPI flows, global yields, Indian bonds, RBI policy, SBI Funds, tax relief
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