India Needs Broader Bond Market Participation, Says CEA V Anantha Nageswaran

India’s Chief Economic Advisor V Anantha Nageswaran said on November 28 that the country’s bond market must now focus on helping mid-sized companies, infrastructure SPVs, supply chain players and municipalities raise money in a steady and affordable way. He made these remarks at the 5th edition of Trust Group’s India Debt Capital Market Summit 2025 in Mumbai as reported by Moneycontrol.

According to him, India has reached a stage where large and highly rated corporates can raise funds without much effort. The difficulty lies with lower-rated or mid-sized companies, which continue to face higher borrowing costs and a limited pool of investors. As reported by Moneycontrol, he said these firms need systematic access to the bond market if India wants

stronger credit flow across the economy.

Nageswaran explained that a world-class debt market needs a credible domestic credit curve for all rating categories, greater availability of government securities for reliable benchmark pricing and active market-making so that liquidity remains even during periods of stress. He added that India also requires wider participation from pension funds, provident funds and insurers, along with more variety in debt instruments such as securitisation structures, credit-enhanced bonds, municipal bonds, green and transition bonds and hybrid capital.

As highlighted by Moneycontrol, he noted that regulators have already set up key building blocks. These include improved corporate bond market infrastructure, electronic trading platforms, rationalised stamp duties, stronger support for securitisation and well-defined frameworks for InvITs, REITs and retail participation. He said the next stage of regulation should be smarter and more efficient rather than simply adding new rules.

Nageswaran said India cannot develop a deep bond market through regulation alone. In his view, issuers, investors, arrangers, credit providers and rating agencies all have a role to play as market builders. He stressed that India will achieve a stronger debt market only when firms across size categories can raise capital smoothly, not just the largest and most established companies.