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India’s $2.69 Trillion Bond Market Boom

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18 Jul 2025
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JM Financial Services
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Smart investor portfolio diversification using bonds

In March 2025, India’s bond market crossed a whopping $2.69 trillion mark. That’s not just another economic statistic—it’s a strong signal of where our economy is heading.

With the government aiming to become an $8 trillion economy in the next five years, this surge in bond investments isn’t just impressive—it’s essential.

But why should you care?

Let’s break it down.


🚀 What’s Driving the Bond Market Surge?

India’s bond market didn’t hit $2.69 trillion overnight. It grew by $100 billion in just 9 months, clocking an overall growth of 6.5%, with corporate bonds alone growing by 9%.

What’s really exciting is that corporate bonds now account for over $602 billion. That’s the money businesses are using to:

  • Fund new infrastructure
  • Scale up operations
  • Invest in R&D
  • Create jobs
  • Drive industrial growth

It’s not just big institutions parking their funds here. Retail investors—yes, everyday individuals—are entering the bond space like never before.


💡 Why Are Individual Investors Turning to Bonds?

Two big reasons:

  1. SEBI's new reforms: The minimum investment for bonds is now just ₹1,000, making it super accessible.
  2. Rise of online bond platforms: Platforms like Bondskart have made discovering and investing in bonds simple, digital, and transparent.

Plus, let’s face it—stock markets are volatile, and FDs often struggle to beat inflation.

Bonds? They hit that sweet spot.

  • Stability
  • Regular passive income
  • Potential for capital appreciation

That makes them perfect for long-term financial planning, especially when the markets feel like a rollercoaster.


🌍 How India Compares to the World

Right now, our bond market is just 0.65x the size of our equity market.

In contrast, developed markets like the US and Japan have bond markets that are 1.2x to 2.0x the size of their equity markets.

That means one thing: massive growth potential.

As India develops, diversifies, and digitizes, bonds will likely become an even bigger piece of the investment puzzle.


Final Thoughts: Bonds Are No Longer Boring

Gone are the days when bonds were seen as dull or complex.

They’re now a smart, stable, and income-generating investment option—especially in today’s unpredictable economy.

And with tools like Bondskart, investing in bonds has never been easier.

 


📲 Ready to Explore Bonds?

Start your journey with just ₹1,000 and take a step towards building a more stable and diversified portfolio.

👉 Download Bondskart
👉 Visit JM Financial Services for more simplified market insights

 

FAQs :-

Q1. What is the bond market and how does it work?
A bond market is a platform where investors buy and sell debt securities issued by corporations or the government. In return, the bond issuer promises fixed interest payments and returns the principal at maturity.

Q2. Why is India’s bond market growing rapidly?
Factors like increased corporate borrowing, infrastructure funding, SEBI’s reforms (e.g., ₹1,000 minimum investment), and rising digital platforms have made bond investing more accessible and attractive.

Q3. Is investing in bonds better than fixed deposits (FDs)?
Bonds often offer higher returns than FDs, especially when investing in corporate bonds. They also provide liquidity and better inflation-adjusted gains.

Q4. Can retail investors invest in bonds in India?
Yes, retail participation is growing thanks to lower entry points and platforms like Bondskart that simplify discovery, selection, and investment in bonds.

Q5. Are bonds safe for first-time investors?
Government and high-rated corporate bonds are relatively low-risk. However, returns may vary based on credit ratings, interest rate movements, and bond duration.

Q6. Do bonds offer monthly or yearly income?
Most bonds provide interest payouts semi-annually or annually, depending on the bond structure. Some may even offer zero-coupon with lump sum at maturity.

Q7. How is bond interest income taxed in India?
Interest from bonds is taxable under “Income from Other Sources” as per the investor's income slab. Some government bonds may offer tax exemptions.

Q8. Can bond prices fluctuate like stocks?
Yes, bond prices can fluctuate based on interest rate changes and market demand, but their volatility is typically lower than equities.