FX.co ★ India 10Y Yield Extends Decline

The yield on India’s 10-year government security (G-Sec) has declined to around 6.8%, extending last week’s slide and approaching a two-month low, as easing geopolitical tensions and a sharp fall in crude oil prices have bolstered demand for sovereign debt. Market sentiment improved after the United States and Iran reached a preliminary agreement to end hostilities and reopen the Strait of Hormuz. This development triggered a steep drop in oil prices, with Brent crude sliding 4.5% to $83.40 per barrel—its lowest level since March 10 and well below the conflict-era peak of $120.

Yields have also faced downward pressure from recent Reserve Bank of India (RBI) measures designed to attract foreign capital, support the rupee, and strengthen the country’s external position. Foreign investors have bought more than $1.6 billion of Indian bonds over the past six trading sessions. At the same time, markets are closely tracking the potential inclusion of Indian government securities in the Bloomberg Global Aggregate Index, a move that could further boost foreign inflows.