For the first time, India plans to raise $10 billion this year through sovereign bonds. India needs to fund domestic projects and its macroeconomic fundamentals are strong so the timing for this makes sense
In her budget speech, minister for finance Nirmala Sitharaman said, “India’s sovereign external debt to GDP is among the lowest globally, at less than 5 percent. The government will start raising a part of its gross borrowing program in external markets in external currencies. This will also have a beneficial impact on the demand situation for government securities in the domestic market.”
Later, India’s finance secretary said sovereign bonds will be worth $10 billion or between 10 percent and 15 percent of all the borrowings. In all, India plans to borrow $108 billion this year. At the end of March 2019, India’s total sovereign debt stood at $103.8 billion, or 3.8 percent of the GDP.
Apoorva Javadekar, assistant professor of finance at the Indian School of Business said, “Issuing dollar denominated sovereign bonds in the global market will help create a pricing reference for Indian corporations. But at the same time, foreign placement of Indian government bonds also risks the crowding-out of Indian companies from the external debt market.”
Last updated: December 26th, 2025
