FPI investment in G-sec topped Rs 3 lakh crore: Here are the factors

Bonds

The foreign portfolio investors (FPI) investment in government securities under Fully Accessible Route (FAR) topped Rs 3 lakh crore mark in this week due to the widening of spread between India and US bonds, as well as New Delhi's credit rating upgrade by S&P Global, experts have said.

According to the Clearing Corporation of India’s (CCIL) data, FPI investment in G-sec under FAR route increased to Rs 3.01 lakh crore as compared to Rs 2.99 lakh crore last week. Here is a quick explainer on what led to the surge:

Why did the FPI Investment in Debt Rise?
The reason for the increase in FPIs' investment in government securities can be attributed to the widening of spread between India and US sovereign bonds, and upgradation of ratings by S&P Global.

FPIs in G-sec - When Was the Last High?
The investment had crossed the Rs 3 lakh crore mark for the first time on March 27, 2025, as per CCIL data.

How much FPI money in Debt Has in One Month?
Around Rs 9,000 crore has been invested by FPIs in Indian government bonds in the last one month.

Spread between India and US Bonds?
The spread between both bond yields started widening after August 21, 2025 from 220 bps to 246 bps on September 16.

Why did the Spreads Widen?
Since June 5, 2025 the yield on the Indian 10-year benchmark bond has risen by 25 bps while that on the US benchmark bond has declined by 36 bps, resulting in a significant widening of the spread.

Will this Trend Continue?
Experts believe that the trend of widening of spread between the two bond yields is likely to continue till they remains at elevated levels.