The 10-year bond yield of India could fall by about 50 basis points in 2024.

According to Yadav, investors should increase the duration of their debt investments in 2024. He noted that the firm has assets worth over 440 billion rupees.

This is an ideal time for investors to increase their debt risk by shifting their focus to higher-risk assets such as seven-year and higher-tenure paper. According to Yadav, the recent rate cuts by the Reserve Bank of India and the US Federal Reserve have supported the demand for Indian bonds. He also noted that duration risk has a higher potential reward than credit risk. The 10-year yield has been hovering around 7% since December, and it is expected to stay at this level for a while.

According to Yadav, the demand for Indian bonds is expected to be robust due to the expected rise in the country’s bank deposit base and the assets under management by pension funds and insurers.

He believes that foreign fund inflows will continue to be flowing into the country due to the inclusion of Indian bonds in the JPMorgan Emerging Market Debt Index.