India has made steady economic progress over the past two decades, but achieving the country’s long-term development vision will require much larger investments. Speaking at the India Today Conclave 2026, Anurag Mittal, Head, Fixed Income, said India must deepen its bond market to finance the ambitious goals linked to the Viksit Bharat vision.
Mittal explained that while India’s growth story has been strong, future development will need long-term capital from a wider range of investors, not just government spending.
Mittal said India’s position in the global economy has improved significantly in the last 20 years. The country’s share in global GDP has grown sharply during this period. “India’s share in global GDP has tripled in the last 20 years, going from about 1.1% to around 3.5%,” he said.
He added that barring the disruption caused by the COVID-19 pandemic, India has seen steady economic growth supported by structural reforms and a gradually opening economy.
Exports have also improved, especially in the services sector. According to Mittal, India’s share in global services exports has doubled over the years.
INFLATION CONTROL AND INVESTOR PARTICIPATION
Mittal also highlighted the progress made in controlling inflation. In the 1980s and 1990s, inflation in India often crossed 10%. However, the situation has improved significantly over time.
“Inflation used to be consistently above 10% earlier, but after the RBI adopted inflation targeting in 2016, it has remained below 5% for the past several years,” he said. Lower inflation has also helped reduce the government’s borrowing costs. Mittal noted that the government’s cost of capital has fallen from around 8–9% earlier to nearly 6.5% now.
He said this has given the government more room to spend on infrastructure and capital expenditure. Mittal also pointed to the rising participation of Indian households in financial markets. Monthly SIP contributions in mutual funds have grown sharply in recent years.
“SIP flows, which were around Rs 5,000 to Rs 6,000 crore until 2019, are now touching nearly Rs 30,000 crore every month,” he said.
HUGE INVESTMENT NEEDS AHEAD
Despite the progress, Mittal said India will need enormous investments to achieve its long-term development goals. “The Viksit Bharat vision is not just about GDP growth. It is about social advancement, environmental sustainability and effective governance,” he said.
He estimated that urban development alone could require around $900 billion over the next decade. In addition, reaching net-zero targets may need more than $1 trillion in investment.
“In total, India may require nearly $20 trillion of investment over the next 25 years,” Mittal added.
BOND MARKET MUST EXPAND
Mittal said the bond market will play a key role in meeting these funding needs. Currently, around 70% of project financing comes from the government, which he believes is not sustainable. “In most advanced economies, 30 to 40% of GDP is financed through the bond market. India will also have to move in that direction,” he said.
At present, India’s corporate bond market remains relatively small, and most bond issuances come from top-rated companies.
“Nearly 70% of issuance happens in AAA-rated bonds. But the companies that need capital the most are often those outside this category,” Mittal explained.
ENCOURAGING WIDER PARTICIPATION
Mittal suggested that the bond market needs a broader investor base. Currently, most investments come from large institutions and wealthy investors. “We have to broaden the investor base so that retail investors participate in fixed income just as strongly as they have in equities,” he said.
He also emphasised the need for better market structure, improved risk-management tools and easier access to information for investors.
A STRONG OPPORTUNITY AHEAD
Mittal concluded that India is currently in a favourable position to strengthen its financial markets.
“Corporate balance sheets are under-leveraged and banking balance sheets are the strongest they have been in many years. This is a good time to deepen the bond market and help finance India’s growth,” he said.
