FX.co ★ India 10Y Yield Nears 5-Week Low

In September, the yield on India's 10-year Government Security (G-Sec) dropped below 6.5%, nearing a five-week low. This decline was influenced by heightened investor concern due to increased US tariffs and elevated visa fees. These tariffs are notably steeper than those imposed on other Asian nations, and an additional $100,000 increase in H-1B visa fees is jeopardizing the placement of Indian workers, posing a risk to IT sector profits and potentially affecting equity flows. A reduction in worker deployment could also lead to decreased remittances, enhancing external stresses and weakening investor sentiment. Moreover, recent data indicated that India's Composite PMI fell in September, with growth decelerating in both the manufacturing and services sectors. While domestic orders saw an uplift post-GST reforms, weak export demand highlighted the adverse effects of the higher US tariffs on Indian exports. Investors are also anticipating the results of the trade discussions between India's Commerce Minister Piyush Goyal, who met with US Trade Representative Jamieson Greer in Washington on Monday.