New normal in India's record debt sales keeps long-tenor bonds under stress

One possibility is that the size of borrowings year-on-year will remain high and there is unlikely to be a reduction in supply, says Ashish Parthasarthy, treasurer at HDFC Bank

The Indian government’s record debt sales this year are part of a new normal for the country, and that’s going to keep long-tenor bonds under pressure despite Asia’s most aggressive easing cycle, says a market veteran.

“One possibility is that the size of borrowings year-on-year will remain high and there is unlikely to be a reduction in supply,” Ashish Parthasarthy, treasurer at HDFC Bank Ltd., the nation’s most valuable lender, said in an interview. “You’ll continue to see a reasonably steep government bond curve.”

Last month’s surprise $20 billion tax break for companies and the sluggish growth in tax revenue have sparked