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Why India's Government Bond Yields Are Rising | Demand, Supply and RBI Policy

Why India's Government Bond Yields Are Rising | Demand, Supply and RBI Policy

Sakshi Batra
Sakshi Batra
  • New Delhi,
  • Oct 12, 2026,
  • Updated Oct 12, 2026, 5:46 PM IST

India's 10-year government bond yield has climbed to a three-year high, raising questions about liquidity, demand and the outlook for interest rates. In this market discussion, Sameer Dalal, President, Natverlal & Sons Stockbrokers explains how tighter liquidity conditions, heavy government bond supply and expectations of further rate increases are weighing on demand for government securities. Foreign investors also assess the spread between Indian debt returns and other markets, making yield levels an important factor in investment decisions. With some investors preferring short-term instruments while waiting for greater clarity on rates, government bond yields may continue adjusting until demand and supply find a balance. When will the bond market stabilise, and what could bring buyers back? Watch the full discussion for the key factors driving India's debt market.