India's 10-year bond yield hits highest level in 2 years
India's 10-year government bond yield rose to its highest spread over the RBI's policy rate in two years as of late August 2025.
This reverses the gains seen earlier this year, when yields dropped after RBI rate cuts and bond buying.
Higher yields mean it's now more expensive for India
Higher yields mean it's now more expensive for India to borrow money—just as the economy is slowing and facing possible US tariffs that could shrink GDP by 1%.
With local buyers like pension funds and insurers pulling back, it gets even tougher for the government to raise funds.
Selloff picked up after RBI signaled caution in August
The selloff picked up after the RBI signaled caution in August, dashing hopes for more rate cuts.
Worries grew when the government talked about cutting consumption taxes, fueling fears of a bigger budget deficit.
Now, all eyes are on September's borrowing plan to see how these challenges will be addressed.