Rising U.S. Yields and State Borrowing Pressure Indian Government Bond Market

Indian government bond yields have risen recently, influenced by higher U.S. Treasury yields and increased state borrowing. Despite lower state debt supply in some periods, investors demand higher returns on government securities due to rising state bond issuance, complicating the Reserve Bank of India's efforts to reduce borrowing costs. The RBI's bond purchases and liquidity management have helped maintain market order amid volatility, while corporate bond spreads have adjusted to reflect credit and duration risks.