Foreign flows into govt bonds to come off record highs

FOREIGN FLOWS INTO government bonds are set to decline in 2025, after spiking to a record high in 2024 as the debt got added to JPMorgan's emerging market debt index, investors said.

- DHARAMRAJ DHUTIA

Interest rate trajectories in India and the US and moves in the rupee will influence the pace of flows, they said.

"For 2025, foreign inflows into the Indian government bond market are expected to remain strong but may not match the record levels of 2024," said Wei Li, head of multi-asset investments at BNP Paribas.

Overseas investors net bought ₹1.24 lakh crore of Indian bonds under the so-called fully accessible route in 2024, clearing house data showed. Most bonds under the route, which allows unfettered foreign investment, are part of JPMorgan's index.