India offers second-highest fixed income returns, attracting further investment from global companies

India, the fastest growing economy in the world, is also the second-best when it comes to offering the returns on fixed income investments, ranking only behind Mexico.

This fact, along with a stable currency, would surely attract further foreign capital flow into the country, even as the future of RBI governor Raghuram Rajan’s tenure remains in dark along with probable hikes in the fed rate in the short term.

Overseas debt investors earn 1.71% total returns from India, with adjusted spot exchange rate with the interest income. In comparison, China offers 0.33% negative returns by the end this year, as per a Bloomberg forecast.


"The quality of governance is improving quite dramatically as evidenced by introduction of measures like the Bankruptcy Law, cleaning up the Indian banks' balance sheet, commitment to recapitalisation, and the potential for the GST Bill to be passed," Vijayan Subramani, MD (treasury and markets), DBS Bank, told ET. "Given global uncertainties, investors are confident about India, which is an attractive investment destination without any doubt," he added.

The list of top five countries offering maximum currency-adjusted returns also include Hong Kong and Indonesia, and to top the list is Mexico (2.9%).

The reform measures have also seen positive growth because of the forecast of strong monsoon, better-than-expected corporate earnings and the positive chances of the passage of the GST bill, thus increasing the confidence that investors have in the country.

Other than this, PM Modi's ongoing visit in US has also made members of the US-India Business Council promising investments worth $45 billion, a majority of which would go in the nuclear energy sector.

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