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Overseas funds have long sought greater access to Indian debt but they hold just 3.4% of the almost Rs 60 trillion of outstanding sovereign bonds.
India’s first planned foray into the overseas bond market may be stillborn due to its historical aversion to borrowing in foreign currencies.
Finance Minister Nirmala Sitharaman said nothing more has been done on the proposed issuance of sovereign bonds since the announcement during the Budget.
The risk of foreign currency borrowing can be minimised if govt and RBI stick to FRBM Act and inflation-targeting frameworks. A Public Debt Management Agency also needs to be set up.
Ashwani Mahajan of Swadeshi Jagran Manch says foreign debt is a dangerous idea as it will open India up to inflation risk & will raise this with Modi.