Development of secondary bond markets in India

Abstract

The Indian financial system has been developing at a rapid phase supported by the strong economic growth. Indian financial markets are one of the most robust markets in the world. The Indian equity market has become the preferred place for investment for a lot of foreign investors. With the top class equity markets and a growing banking sector, the country needs to develop a strong bond market. Both the government and corporate bond markets in India have been growing in size, but they are quite illiquid. The government bond market has caught the attention of a large number of investors including retail investors. The corporate bond market however has a small number of investors mostly dominated by QIBs.