India-US bond spread widens by 250 bps as AI trade unwinds, crude remains elevated
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- ✓The spread between India’s 10-year government bond yield and the US counterpart widened beyond 250 basis points.
- ✓Market participants said, "The unwinding of the US AI investment trade could add to pressure on Indian bonds." This shift happened as domestic borrowing costs rose and global investors reassessed their technology stock positions.
Story at a Glance
- Category
- MARKET
- Reported By
- MoneyControl
- Reading Speed
- 5 Minute(s)
- Market Focus
- India Economy
The spread between India's 10-year government bond yield and its US counterpart has widened beyond 250 basis points, as rising domestic borrowing costs and inflation risks collide with a shift in global investment flows triggered by the unwinding of the US artificial intelligence trade, said market participants. The spread has widened back above 250 basis points for the first time in around four months, since June 2026, after narrowing to about 194 basis points in early October.
India's 10-year benchmark yield is at 7.47 percent, against 4.96 percent for the US 10-year Treasury, putting the differential at 251 basis points. The widening comes as Indian bonds face pressure from tighter banking-system liquidity and expectations of further monetary tightening, while global investors reassess exposure to AI-linked assets and US Treasuries benefit from safe-haven demand. The spread has fluctuated sharply over time.
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