India's Sovereign Debt Draws Global Conviction

India's debt market is gaining global traction, with long-duration government securities (G-Secs) emerging as a top pick.

- Vivek Paul, Head (Portfolio Research), BlackRock Investment Institute

Vivek Paul, head of portfolio research at BlackRock Investment Institute, tells Mahesh Nayak that Indian yields appear fairly valued and are expected to remain stable over a five-year horizon. Excerpts:

What macroeconomic trends make India's long-term G-Secs an attractive bet?

We favor Indian G-Secs due to their stable yields and attractive valuations, driven by several structural and macroeconomic trends in India. Demographic advantage and digital transformation support long-term investor confidence. The benign inflation outlook, with the CPI being projected at 2.5% in 1HFY26, and fiscal consolidation—fiscal deficit target of 4.4%—add to its appeal. In contrast, rising long-term yields in the US, fueled by anticipated inflationary pressures and higher borrowing costs, diminish the attractiveness of its government bonds. Given that the RBI is flexible on rates and govt capex is strong, we remain bullish on India's prospects.