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India's Corporate Bond Market Lags at 18% GDP: IMC Report Roadmap

India's corporate bond market is significantly underdeveloped at just 18% of GDP, compared to 80-120% in peer economies like South Korea and Malaysia. The IMC Chamber of Commerce report, released by PM-EAC Member Sanjeev Sanyal, outlines a strategic roadmap to transform the market. Key proposals include real-time trade publication via India-TRACE, reducing minimum investment from Rs 10,000 to Rs 1,000, and launching a UPI-native Bharat Bond Direct platform. The report also recommends a Bond Market Development Council and a Rs 25,000-50,000 crore guarantee facility to boost infrastructure bond ratings.

Key Points: India Corporate Bond Market at 18% GDP: IMC Report

  • India's corporate bond market is only 18% of GDP, far behind peers at 80-120%
  • Report proposes doubling depth to 35% by 2030 with 10 million retail investors
  • Key measures include India-TRACE for price transparency, lower bond lot to Rs 1,000, and Bharat Bond Direct app
  • Proposed Bond Market Development Council and Rs 25,000-50,000 crore guarantee facility for infrastructure
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India's corporate bond market significantly underdeveloped at 18% of country's GDP, says IMC report

IMC report reveals India's corporate bond market is underdeveloped at 18% GDP vs 80-120% in peers. Roadmap includes retail push, TRACE, and Bharat Bond Direct.

"India's corporate bond market is currently characterised by low liquidity, a lack of retail participation--only 80,000 investors --and a short average bond tenor--4.2 years --which is insufficient for long-term infrastructure needs. - IMC Chamber of Commerce and Industry"

By Saurav Mukherjee, Mumbai, April 4

India's corporate bond market is significantly underdeveloped at 18% of country's GDP, while its peer economies like South Korea and Malaysia have their corporate bond market stand at 80-120% of their GDP, says a report by IMC Chamber of Commerce which was released on Monday by PM-EAC Member Sanjeev Sanyal during IMC Capital Market Conference 2026 at Mumbai's NSE.

Named "Building the Bond: Financing Viksit Bharat (2026)," the IMC report aims to outline a strategic roadmap to transform India's corporate bond market to support its 2047 economic goals.

In the report, the IMC Chamber of Commerce and Industry stated that India's corporate bond market is currently characterised by low liquidity, a lack of retail participation--only 80,000 investors --and a short average bond tenor--4.2 years --which is insufficient for long-term infrastructure needs.

In this report, the IMC states that the Indian capital bond market can double its market depth to 35% by 2030 by increasing retail investor participation to 10 million and nearly doubling the average bond tenor to 8.5 years.

Among other things, the report claims the development in the capital bond markets is planned through immediate and near-term actions through three means.

First, bring India-TRACE -- a mandate for real-time publication of all bond trades to ensure price transparency, second, via lower entry barriers -- reducing the minimum bond investment lot from Rs 10,000 to Rs 1,000 to make it accessible to middle-class households, and third, via Bharat Bond Direct -- by launching a mobile-first, UPI-native platform for retail bond investing.

The report also mentioned structural institutional changes where a proposed Bond Market Development Council (BMDC) would coordinate efforts between the Finance Ministry, SEBI, and RBI.

It added suggested key fiscal measures, including creating a Rs 25,000-50,000 crore guarantee facility (IIBGF) to help greenfield infrastructure projects achieve "bondable" AA credit ratings.

- ANI

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Reader Comments

P
Priyanka N
The guarantee facility of Rs 25,000-50,000 crore for greenfield projects is interesting. But will this actually help infrastructure projects get AA ratings? In my experience, the issue isn't just guarantees - it's about execution delays, regulatory clearances, and contract enforcement. Unless these structural issues are fixed, even a guarantee won't make investors confident. Need to see the finer details of this IIBGF.
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Michelle N
Coming from a market where bond markets are deep and liquid, this report is spot on. India TRACE for real-time trade publication is a must - right now pricing is opaque and retail investors have no clue what fair value is. The target of 10 million retail investors by 2030 is ambitious though. Need massive awareness campaigns. Good read, thanks for covering this!
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Rahul R
Only 80,000 retail investors? That's shocking! In a country of 140 crore, that's almost nothing. The idea of Bharat Bond Direct with UPI integration could be a game-changer, but who will regulate these platforms? We already saw issues with some digital lending apps. Need SEBI to be very vigilant. Also, 4.2 years average tenor is too short for infra needs - we need 10-15 year bonds for highways and power projects.
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Shweta Y
As someone who works in finance, the 18% GDP figure is indeed alarming. But let's be realistic - bond markets need sophisticated institutional investors like pension funds and insurance companies to provide depth. Our insurance penetration is still low. The Bond Market Development Council is a good idea if it can actually coordinate between Finance Ministry, SEBI and RBI - these three don't always see eye to eye! Hope this isn't just another committee with no follow-through.

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