India is among the top issuers of debt globally in 2014 along with China and Brazil. The year 2014 has seen over $525 billion proceeds under-written so far, says the Thompson Reuters Deals Intelligence report for debt capital markets. The year has been a record one for emerging markets as they have led the issuance of debt paper during the year.
Compared to last year, issuance by China jumped 123 per cent compared to the previous year. Issuance of bonds from India has risen 52 per cent while that from Brazil is up 21 per cent compared to last year. The only BRIC nation to see a sharp drop in borrowing is Russia, which has seen an 80 per cent drop in bond issuances.
Following the turmoil in the world currency markets, after the US Federal Reserve announced its intention to unwind its massive quantitative easing programme, emerging market currencies went into a tailspin, as they were running record high deficits. This year, most of these countries have tried to recoup forex reserves through different means. India has seen a sharp jump in foreign capital inflows into Indian debt and the government has responded by raising the investment limits for FIIs too. Some more liberalisation is expected by the market. This year has seen $25.31 bn foreign capital inflows into Indian debt, which is well ahead of equities for the first time.