India 10Y Yield Approaches 10-Month Highs

2026-01-23 09:32 By Mariene Camarillo 1 min. read

The yield on India’s 10-year G-Sec rose to around 6.67%, attempting to climb back toward ten-month highs, as upbeat PMI data boosted sentiment.

Flash surveys showed India’s economic activity gained momentum in January, with the manufacturing PMI rising to 56.8 in December, while the services PMI climbed to 59.3, pushing the composite index to 59.5.

Strong domestic demand was the main driver, even as high US tariffs and ongoing trade talks with Washington continued to cloud growth prospects.

At the same time, rising state government borrowings are complicating the Reserve Bank of India’s efforts to push yields lower.

Sub-sovereign debt issuance is approaching levels of central government borrowing, increasing supply and pushing up long-term bond yields, despite recent rate cuts.

Analysts warn this surge is steepening the yield curve and limiting the transmission of monetary policy, with the RBI expected to step in with central government bond purchases to ease pressure.



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