India's corporate bond mkt poise to exceed Rs 100 tn by 2030: NITI Aayog report

New Delhi, Dec 11 (PTI) India’s corporate bond market has the potential to exceed Rs 100–120 trillion by 2030, provided some deeper structural reforms and institutional capacity-building are undertaken, according to a report.

Over the past decade, India’s corporate bond market has expanded significantly, with outstanding issuances rising from Rs 17.5 trillion in FY2015 to Rs 53.6 trillion in FY2025, recording an annual growth rate of nearly 12 per cent, a report on 'deepening the corporate bond market in India' released by Niti Aayog on Thursday said.

"With continued policy focus, technological innovation, and harmonised regulation, India’s corporate bond market has the potential to exceed Rs 100–120 trillion by 2030, evolving into a key pillar of India’s financial system, one that channels domestic and global capital towards productive sectors and underpins the country’s long-term growth trajectory toward Viksit Bharat 2047," it said.

Over the past decade, India has made commendable strides in expanding its debt market infrastructure and regulatory framework, but compared to global peers, India has not yet fully tapped its vast potential, Niti Aayog CEO BVR Subrahmanyam said while releasing the report.

The market now accounts for around 15–16 per cent of GDP, a considerable improvement, though still well below the levels seen in countries like South Korea, Malaysia, or China.

"Strengthening the corporate bond market demands continued reform in market infrastructure, risk management tools, investor diversification, and credit enhancement mechanisms. Deepening these reforms will not only catalyse private sector investment but also align financial development with the nation’s strategic goals of inclusive, sustainable, and technology-driven growth," he said.

To expand the market, the report said there is a need for deeper structural reforms and institutional capacity-building.

Regulatory frameworks will evolve to support a unified architecture, more effective resolution mechanisms, and a conducive environment for innovation, it added.

Market infrastructure will be upgraded for scale and resilience, enabling digital transformation across issuance, trading, and settlement, it said, adding that the issuer base will be broadened through the promotion of new asset classes, while product innovation will be institutionalised to introduce sustainable, inclusive, and long-term investment options. Investor participation will be expanded through targeted incentives, greater integration of foreign investors, and improved transparency, it said.

Complementing these efforts, it said, technological advancements will enhance data-driven decision-making and market intelligence, helping create a more efficient, transparent, and inclusive bond market.

The recommendations presented in this report are not merely incremental improvements but part of a comprehensive strategy to make India’s corporate bond market globally competitive, resilient, and inclusive, it said.

Implemented in a phased and coordinated manner, these reforms would not only address short-term frictions but also build the institutional depth required for sustainable long-term development, it added.

In the initial phase, the report said, efforts focus on streamlining regulations and procedures, enhancing coordination among regulators, and improving legal clarity.

Simultaneously, it said, strengthening market infrastructure, through digital access, reliable credit ratings, and robust trading platforms, will lay the foundation for broader adoption and improved liquidity.

"Early measures will also target the issuer segment by simplifying market access and building momentum through quick wins, while fostering basic innovation in instruments and expanding investor outreach. These short-term actions aim to reduce friction, deepen participation, and build confidence across the ecosystem," it said.

Talking about the impediments, the report said regulatory overlaps between multiple authorities, extensive disclosure requirements, and procedural delays discourage broader participation.

The secondary market remains shallow, with limited liquidity and price transparency and institutional investors, such as insurance companies and pension funds, are constrained by investment norms that limit exposure to lower-rated securities.

In addition, it said, weak debt recovery mechanisms, high transaction costs, and tax asymmetries reduce investor appetite and restrict the flow of long-term capital.

These structural frictions collectively impede the corporate bond market from realising its full potential as an engine of capital formation and financial inclusion, it said. PTI DP DP BAL BAL