NITI Aayog Releases Report to Deepen India’s Corporate Bond Market for Growth

During the release, Shri Subrahmanyam emphasised that India’s transition toward the vision of a Viksit Bharat @2047 requires a financial ecosystem capable of mobilising long-term capital at scale.

 

Shri B.V.R. Subrahmanyam, CEO of NITI Aayog, released a landmark report titled “Deepening the Corporate Bond Market in India” on 11 December 2025 in New Delhi, in the presence of senior officials from NITI Aayog. The report provides an in-depth assessment of India’s corporate bond landscape and outlines a comprehensive reform roadmap to build a robust, liquid, and diversified bond market that can support India’s long-term developmental aspirations.

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Corporate Bond Market Critical for Viksit Bharat Vision

During the release, Shri Subrahmanyam emphasised that India’s transition toward the vision of a Viksit Bharat @2047 requires a financial ecosystem capable of mobilising long-term capital at scale. A deeper corporate bond market, he noted, is essential to:

• Expand market access

• Improve liquidity

• Attract a diverse set of investors

• Strengthen long-term financing channels beyond bank credit

He underscored that a well-functioning bond market is a “central pillar for sustaining investment and long-term growth.”

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Key Findings: Growth Amid Persistent Structural Challenges

The report observes that India’s corporate bond market has grown steadily over the last decade, reflecting:

• Higher outstanding issuances

• Improvements in regulatory frameworks

• Increased participation from institutional investors

However, significant constraints remain:

• Shallow market depth

• Concentrated investor base, dominated by a few institutions

• Low secondary-market liquidity

• Limited participation of mid-size firms

• Modest risk appetite for lower-rated issuers

Despite these gaps, the study identifies substantial untapped potential for India to elevate its bond market closer to global benchmarks.

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Reform Roadmap: Building a Deep, Resilient and Inclusive Bond Market

The report presents a sequenced set of reforms drawn from international best practices to unlock the next phase of market development. Key recommendations include:

1. Strengthening Legal and Regulatory Frameworks

• Streamline issuance procedures

• Enhance disclosure norms

• Improve bankruptcy resolution mechanisms

2. Enhancing Market Infrastructure and Transparency

• Expand market-making facilities

• Strengthen corporate bond repositories

• Improve price discovery mechanisms

3. Boosting Participation Across Investor Categories

• Encourage greater investments from insurance and pension funds

• Enable safe and accessible retail investor participation

• Support credit-enhancement mechanisms for lower-rated issuers

4. Facilitating Issuances by Mid-Size Firms

• Simplify documentation requirements

• Provide incentives for first-time issuers

• Introduce smaller lot sizes and flexible tenors

5. Expanding Product Diversity

• Long-tenor instruments

• Sustainability-linked and green bonds

• Credit-enhanced structures

• Instruments supporting transition finance

6. Improving Liquidity

• Deepen repo markets for corporate bonds

• Enable active market-making

• Encourage electronic trading platforms

7. Leveraging Digital Innovation

• Tokenised bonds

• Integrated real-time market data systems

• Digital onboarding and KYC infrastructure

The report highlights the unique opportunity for corporate bonds to drive financing for infrastructure, MSMEs, climate and transition finance, and new-age sectors, thereby aligning market development with national growth priorities.

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CEO’s Remarks: Bond Market Modernisation Key to Development Finance

Shri Subrahmanyam congratulated the NITI Aayog team for developing an analytically rich, forward-looking report. He emphasised that deepening the corporate bond market will:

• Reduce over-reliance on banks

• Improve capital allocation efficiency

• Mobilise private finance for development priorities

• Enable stable, low-cost, long-term funding for India’s growth trajectory

He added that the recommendations provide a practical blueprint for:

• Enhancing transparency

• Broadening the investor base

• Supporting lower-rated issuers

• Modernising market infrastructure in line with global standards

A deeper bond market, he concluded, will play a crucial role in achieving India’s Viksit Bharat @2047 ambitions.