India targets foreign investment inflows, deeper corporate bond markets

India's Department of Economic Affairs is prioritizing efforts to draw foreign capital inflows while simultaneously working to deepen and broaden the country's corporate bond market, said Alok Tiwari, Joint Secretary at the DEA.

Tiwari emphasized the government's focus on improving market depth, liquidity, and participation levels in corporate bonds as part of its broader economic strategy. The move reflects New Delhi's recognition that a more robust domestic bond market is essential for channeling investment into corporate sector growth and infrastructure development.

Enhancing the corporate bond market's appeal to international investors is seen as crucial for diversifying India's capital sources and reducing reliance on bank lending for corporate financing. Better liquidity and participation would also help establish more transparent price discovery mechanisms and provide greater flexibility for issuers seeking alternative funding avenues.

These initiatives align with India's broader financial sector reforms aimed at modernizing capital markets and positioning the country as an attractive investment destination. The government believes that attracting foreign portfolio investment into corporate bonds could help sustain economic growth while supporting the corporate sector's long-term financing needs.