India to sell INR140B of "7.09% government security 2074" in auction Sept. 4

India to sell INR140B of "7.09% government security 2074" in auction Sept. 4

The Indian government has announced plans to auction INR140 billion worth of 7.09% government securities maturing in 2074 on September 4. This move is part of the government's strategy to manage its debt and funding requirements.

The auction comes amidst a backdrop of increased government bond yields and a slowdown in demand. Indian government bonds have been under pressure due to heavy debt supply and concerns over fiscal slippage [2]. The benchmark 10-year bond yield has risen significantly in recent months, reaching 6.6072% as of July 2, 2025 [2].

The government's decision to cut the goods and services tax (GST) is also influencing market sentiment. The GST Council meets on Wednesday and Thursday to discuss the proposed move to a two-rate structure, which is expected to increase the fiscal burden and debt supply [2].

Despite these challenges, the Indian economy continues to show resilience. The GDP growth data for the April to June quarter surprised the market, expanding by 7.8% year-on-year, exceeding the expectations of economists polled by Reuters [2].

The Reserve Bank of India (RBI) will be closely monitoring the situation, as traders expect uncertainty to continue until the central bank intervenes [2]. The overnight index swap rates have been rising amid paying pressure after the strong GDP data [2].

In other news, OpenAI, the parent company of ChatGPT, is planning to set up a data center in India with at least 1 gigawatt capacity. This move could mark a significant step forward in OpenAI's expansion in Asia, particularly with its Stargate-branded artificial intelligence infrastructure push [1]. OpenAI has already registered as a legal entity in India and is building a local team, with plans to open its first office in New Delhi later this year.

References:
[1] https://www.thehindu.com/sci-tech/technology/openai-plans-india-data-centre-with-at-least-1-gigawatt-capacity-report/article69999300.ece
[2] https://www.tradingview.com/news/reuters.com,2025:newsml_L4N3UO0A8:0-india-bonds-fall-as-heavy-supply-weighs/