HSBC buys at least $3B in Indian government bonds since July

HSBC Holdings has quietly become one of the biggest foreign buyers of Indian government debt, snapping up at least $3B in bonds since July. The purchases are being funded through a specialized deposit program aimed at overseas Indians, making this a story about diaspora dollars flowing back home, just not in the way most people imagined. The move comes at a time when foreign appetite for Indian bonds has shifted from steady to voracious. Foreign investors have poured $7.7B into Indian debt year-to-date through mid-July 2026, already surpassing the $6.6B that flowed in during all of 2025. HSBC’s $3B chunk alone accounts for a massive share of that total. Why Indian bonds, and why now Indian 10-year government securities have been trading with yields between 6.8% and 7%. Compare that to developed-market equivalents, and you’re looking at a 3-4% premium. The Indian government removed both withholding taxes and capital gains taxes on government bonds for foreign investors, effective April 1, 2026. Before that policy shift, foreign investors had to factor in tax drag that nibbled away at the yield advantage. Now the gross yield is closer to the net yield, which makes the risk-return cal...