Indian bond market is gaining strength due to easing inflation and expansionary policies by the RBI as per Jefferies report.
Consumer price inflation in India has fallen to 3.2%, the lowest level since July 2019, allowing the RBI room to lower interest rates which have already been cut by 50 basis points.
Jefferies predicts an additional 75 basis points cut by the end of 2025, making Indian government bonds more appealing compared to developed markets like the US.
The Indian rupee's strength, along with global performance of local-currency bonds, reinforces positive sentiment in the Indian bond market, attracting international investors seeking alternatives to volatile G7 bonds.