FX.co ★ India 10Y Yield Steady Ahead of FY27 Budget

The yield on India's 10-year Government Security (G-Sec) maintained its position around 6.66%, trading steadily within a narrow band. This trend reflects investor anticipation regarding increased government borrowing for the fiscal year 2027. Analysts from foreign banks Citi and DBS forecast net borrowing to rise to approximately INR 11.8–12 trillion, compared to INR 11.4 trillion projected for FY 2026. Meanwhile, gross issuance is anticipated to hit unprecedented levels, estimated between INR 16.5 trillion and INR 16.8 trillion. Market participants are paying close attention to the upcoming FY 2027 budget announcement on February 1st, which will outline borrowing strategies, fiscal deficit objectives, and the debt-to-GDP ratio—key indicators that will shape investor sentiment within the bond market. Additionally, the mood among investors was cautiously optimistic, as a decline in US Treasury yields somewhat neutralized previous gains, while traders assessed shifts in Japanese government bond yields and general fluctuations in the dollar.