The Indian government plans to raise $93.34 billion (INR 8 trillion) through bond sales between April and September, accounting for 54% of its estimated gross borrowing for the upcoming fiscal year, according to the finance ministry.
Market expectations had ranged between 56% and 59% of the $172.91 billion (INR 14.82 trillion) borrowing target for the fiscal year starting April 1. Last year, the government borrowed 53% of its $163.88 billion (INR 14.01 trillion) target in the same period.
The fiscal deficit target for 2025-26 is set at 4.4% of gross domestic output, down from 4.8% in the current fiscal year. The government has not introduced any new bond maturities but has increased the share of the benchmark 10-year security to 26% of the total issuance.
The size of each auction for the 10-year benchmark paper has also been raised to $3.5 billion (INR 300 billion) from $2.57 billion (INR 220 billion) in the October-March period.
The bond sales will include maturities of 3, 5, 7, 10, 15, 30, 40, and 50 years. The government has reduced borrowing through ultra-long bonds—those maturing in 30 to 50 years—to 35%, down from 38% during April-September last year.
Bond investors had recommended a reduction in ultra-long bond issuances due to weak demand at the end of the auction cycle in February.
In addition, the government plans to sell $1.17 billion (INR 100 billion) worth of green bonds in the next six months, after issuing $2.34 billion (INR 200 billion) in green bonds during the October-March period.
The yield on India’s 10-year benchmark bond fell to 6.6022% on Thursday, its lowest level in over three years. Bond yields are expected to decline further on Friday, although the 10-year bond may underperform due to increased supply in this segment.
Separately, the government will borrow $28.84 billion (INR 2.47 trillion) through Treasury bill sales between April and June, significantly below market expectations.
