Now Reading: Index deferral, global yields to keep foreign bond flows muted: SBI
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Index deferral, global yields to keep foreign bond flows muted: SBI
Index deferral, global yields to keep foreign bond flows muted: SBI
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…
The Story in Brief
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.
The Indian Opinion
The narrative that tax breaks alone can lure foreign money misses the bigger picture. Yields, rate cycles and currency expectations matter more than a tax holiday. SBI Funds' sobering assessment suggests policy tweaks are no substitute for macroeconomic stability. The real test will come when global rates start trending down, will Indian bonds then attract the flows that now remain on the sidelines?
Sources (2): thehindubusinessline.com, ndtvprofit.com
This story was synthesised by AI from the 2 sources linked above.
Updated: this story now draws on 2 sources.
