Indian Bond Market Showing Strength With Easing Inflation

The Indian bond market is showing signs of strength, driven by easing inflation and expectations of more interest rate cuts from the Reserve Bank of India (RBI), says a report by Jefferies.

- CORRESPONDENT

The report highlighted that this environment is creating an attractive setup for domestic bonds, particularly for long-term investors in a shifting global landscape.

Consumer price inflation in India has been declining steadily. Over the last fiscal year, it averaged 4.6 per cent, and in April 2025, it fell to just 3.2 per cent, the lowest level since July 2019.

This drop in inflation is giving the RBI more room to lower interest, since then, the RBI has already cut policy rates by 50 basis points. Jefferies expects an additional 75 basis points of cuts by the end of 2025.