NITI Aayog Unveils Strategic Roadmap to Strengthen India’s Corporate Bond Market

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NITI Aayog has released its report titled “Deepening the Corporate Bond Market in India”, highlighting the need for a resilient financial ecosystem capable of mobilising long-term capital. The report, unveiled by CEO B.V.R. Subrahmanyam in New Delhi, presents a strategic roadmap aimed at expanding market access, enhancing liquidity, and boosting investor participation.

Importance of a Robust Corporate Bond Market

The report emphasizes that a strong corporate bond market is crucial for financing India’s development goals. By diversifying funding sources beyond traditional bank credit, corporate bonds facilitate efficient risk-sharing and provide stable, market-based capital to productive sectors. As India advances toward its Viksit Bharat vision, access to long-term financing emerges as a key driver of sustainable economic growth.

Current Market Scenario and Challenges

Despite regulatory reforms and growing investor interest, the market’s depth remains limited. Challenges include a concentrated investor base, low secondary-market activity, and limited access for mid-sized issuers. Although outstanding volumes have increased, India’s corporate bond market still lags behind major global economies in both scale and diversification.

Proposed Reforms and Global Insights

The report draws on international best practices to suggest reforms in legal, regulatory, and market infrastructure frameworks. Key recommendations include introducing credit-enhanced instruments, long-tenor and sustainability-linked bonds, stronger market-making and repo facilities, and greater data transparency. It identifies opportunities in financing infrastructure, MSMEs, and green transition projects, while stressing the importance of broadening investor participation, supporting lower-rated issuers, and modernizing market infrastructure through digital tools like tokenized bonds and integrated data platforms. Officials highlighted that a deeper corporate bond market will reduce dependency on banks, improve capital allocation, and mobilize private finance to support India’s long-term developmental ambitions.

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