India's planned maiden $10 bn foreign debt sale mired in confusion

India’s plan for its maiden overseas bond offering is becoming mired in confusion.

The office of Prime Minister Narendra Modi is opposed to selling debt in foreign currencies, ET Now television channel reported Thursday, citing Cogencis news agency. The top finance ministry official overseeing the $10 billion debt sale was transferred to another department.

Yields on India’s benchmark 10-year debt jumped 12 basis points, the most since January, to 6.55% , on concern that the plan will be scrapped, with the government then moving to sell more bonds locally.

“The market was expecting a sizable dollar issuance to replace domestic borrowing,” said Badrish Kulhalli, head of fixed income at HDFC Life Insurance in Mumbai. There’s now less clarity over the size and nature of the bond sale, he said.
Subhash Chandra Garg, the top finance ministry official overseeing the bond sale, is seeking early retirement after he was abruptly moved out of the role three weeks after the sale was announced in the annual budget, according to people with knowledge of the matter.

Shifting Garg “will likely put in disarray the plan to launch in October this year,” said Prakash Sakpal, economist at ING Bank NV in Singapore. “His sudden departure at this juncture may not go down well with the market.”

Garg didn’t answer multiple calls and a text message to his mobile phone. D.S. Malik, a finance ministry spokesman, said it is “not a subject matter concerning my ministry.” Sitanshu Kar, the government’s principal spokesman, couldn’t comment.

To contact the reporters on this story: Kartik Goyal in Mumbai at;Subhadip Sircar in Mumbai at

To contact the editors responsible for this story: Tan Hwee Ann at, Nicholas Reynolds
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