NITI Aayog Calls for Deepening India’s Corporate Bond Market

NITI Aayog Releases Strategy to Strengthen India’s Corporate Bond Market

NITI Aayog has released a comprehensive report titled “Deepening the Corporate Bond Market in India” , outlining reforms needed to build a resilient financial ecosystem capable of mobilising long-term capital. The report was unveiled in New Delhi by CEO B.V.R. Subrahmanyam and aligns with India’s broader ambition of achieving Viksit Bharat @2047 .

Why Corporate Bonds Matter

The report underscores that a strong corporate bond market is vital for meeting India’s expanding investment needs, particularly in infrastructure, manufacturing and the green transition. By reducing excessive dependence on bank credit, corporate bonds enable better risk distribution and provide stable, market-based financing for long-gestation projects. A diversified bond market is therefore seen as a cornerstone of sustainable economic growth.

Present Status and Key Challenges

Although India’s corporate bond market has grown in size over the past decade, the report notes that it still lacks sufficient depth and liquidity. Investor participation remains concentrated among institutional players, while secondary-market trading is relatively thin. Mid-sized and lower-rated firms face limited access, and the overall market remains smaller and less diversified compared to global peers.

Reform Agenda and Global Best Practices

Drawing on international experiences, NITI Aayog recommends reforms across regulatory frameworks, market infrastructure and product innovation . Key proposals include expanding credit-enhanced instruments , introducing longer-tenor and sustainability-linked bonds , strengthening market-making and repo facilities, and improving data transparency. The report also highlights the role of corporate bonds in financing MSMEs and climate-resilient projects.

Future Direction

To unlock the market’s full potential, the report calls for broader investor participation, support for emerging issuers and adoption of digital tools such as tokenised bonds and integrated data platforms . Deepening the bond market, it argues, will improve capital allocation and mobilise private investment for India’s long-term development goals.

Exam Point

• Report: “Deepening the Corporate Bond Market in India” .

• Released on 11 December 2025 by NITI Aayog .

• Highlights gaps: limited depth, investor concentration, low liquidity.

• Proposes regulatory reforms, diversified products and digital innovations.