FX.co ★ India 10Y Yield Edges Lower

The yield on India’s 10-year G-Sec hovered near 6.9%, edging lower amid renewed buying interest as softer crude prices eased concerns over inflation and fiscal pressures. Sentiment improved after oil prices retreated on hopes of renewed US–Iran diplomatic engagement, even as uncertainty persisted around the Strait of Hormuz and over the durability of the ceasefire ahead of its expiry. The move was further supported by expectations that lower energy costs could reduce India’s import bill and bolster macroeconomic stability. However, additional declines in yields were capped as volatile oil markets kept inflation risks in focus. Foreign investor outflows continued, albeit at a slower pace, with positioning remaining highly sensitive to shifts in crude prices and geopolitical developments. Overall, yields are expected to remain range-bound within 6.85%–7.00%, as markets await the Reserve Bank of India’s policy minutes for clearer guidance on the inflation–growth outlook.