India Bonds Trade In Narrow Range Ahead Of Key State Borrowing Auction

Indian government bond yields traded in a narrow range on February 24, 2026, as investors remained cautious before a ₹44550 crore state debt auction scheduled for the day, as per news reports. The amount marks the highest weekly state borrowing in the financial year ending March 31, 2026.

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The benchmark 6.48% 2035 government bond yield stood at 6.7021% as of 10:00 a.m. IST. The yield had eased 2 basis points to 6.6970% in the previous session. Bond yields move inversely to prices.

Indian states plan to raise ₹44550 crore in the auction, broadly in line with the scheduled borrowing calendar, according to Reuters. Supply Pressure And RBI Support

The late-year increase in issuance has kept yields elevated as market participants factor in additional supply. Reuters reported that the higher borrowing comes despite bond purchases conducted during the year by the Reserve Bank of India to absorb part of the supply in the market.

On February 28, 2026, the federal government is scheduled to sell ₹32000 crore of the benchmark 10-year 2035 bond, according to Reuters. The outcome of this auction is expected to influence yield movements through the end of the financial year.

Global Cues And Swap Rates

The Global factors also remained in focus. Softer U.S. Treasury yields provided some support to domestic bonds, while crude oil price movements continued to be monitored amid U.S.-Iran tensions, Reuters reported.
In the rates market, India’s overnight index swap (OIS) segment saw limited activity. The one-year and two-year OIS rates were not traded as of the reporting time, while the five-year OIS rate was largely unchanged at 6.04%, according to Reuters.

Reuters reported on February 24, 2026, that the bond market stayed in a range in the early hours of trading as traders waited for the results of the state borrowing auction and the central government's debt sale later in the week.