Ghosts of past loans haunt India, borrowings for repayments likely to soar

Redemption pressure on states, which normally issue plain vanilla bonds with 10-year maturity, increased from the year ended March 2018, according to the RBI's Study of State Finances

Indian states raked up debt to fund widening deficits. They may now have to borrow more to meet repayment commitments, a report from the central bank showed.

Redemption pressure on states, which normally issue plain vanilla bonds with 10-year maturity, increased from the year ended March 2018, according to the Reserve Bank of India’s Study of State Finances. That implies that their borrowings are expected to soar.

The maturity profile of states’ debt indicates near to medium-term stress related to repayments, which is likely to peak in 2026-27. That underscores the risks for investors in the nation’s bond market, where