The yield on the Indian 10-year G-Sec hovered around 6.56% in September, trading in a narrow range near five-month highs, supported by the Reserve Bank of India’s policy stance and bets of potential US Federal Reserve rate cuts. Market expectations of another RBI rate cut this year have been trimmed following stronger-than-expected GDP growth, while Fed rate cut bets have risen after July’s JOLTS report showed weaker-than-expected job openings. This reflects the widening interest rate gap between India and the United States, as the Fed’s potential cuts make Indian bonds relatively more attractive, keeping yields stable. Additionally, foreign investment has surged, driven by attractive yields and India’s inclusion in global bond indices, helping support demand and stabilize the market. However, challenges remain as domestic banks have urged the RBI to limit issuance of long-term government bonds, citing weak investor demand and the risk of higher borrowing costs for the government.