FPIs Purchased ₹13,397 Crore in FAR Bonds in October, Marking FY26 High

India’s debt market strengthened in October, driven by the US Federal Reserve’s rate cuts and optimism surrounding a potential trade deal between India and the US. The improving macro environment spurred renewed foreign interest in government securities through the RBI’s Fully Accessible Route (FAR).

Bond Inflows Hit FY26 High

Foreign investors bought a net ₹13,397 crore worth of central government securities under FAR in October, the highest in FY26  compared to ₹8,333 crore in September. According to the Clearing Corporation of India (CCIL), FPIs have been consistent net buyers over the past four months, marking a clear recovery after a heavy sell-off earlier in the fiscal.

As per the news reports, the spread between India’s benchmark 10-year government bond and the US 10-year note expanded from 190 bps in June to 251 bps in October, improving relative attractiveness for Indian debt.

Reversal After Early-Year Outflows

The inflows come after FPIs pulled out over ₹31,000 crore from FAR securities in the first quarter of FY26: ₹11,145 crore in April, ₹12,317 crore in May, and ₹7,800 crore in June as global yields surged amid trade uncertainties.

Between June 2024 and March 2025, when Indian bonds were phased into JPMorgan’s emerging market index, total FPI purchases through FAR touched ₹1.09 trillion, reflecting front-loaded positioning ahead of the inclusion period.

Read More: SEBI Proposes New Rules to Boost Resident Indian Participation in FPIs!

Conclusion

October’s rebound in FPI debt inflows signals renewed confidence in India’s fixed-income market, supported by attractive yield differentials and stable macro fundamentals. Market participants expect inflows to remain firm as index inclusion gains traction and rate dynamics stay favourable.

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