Comparative Study Between the Us and Indian Bond Markets

Abstract

Bonds represent a form of financial instrument traded within the bond market, offering investors regular interest payments and repayment of the principal amount upon maturity. Notably, there are significant disparities between the bond markets of the United States and India. Firstly, the US bond market significantly outweighs its Indian counterpart. In 2021, the US bond market stood at approximately $45 trillion, while the Indian market was estimated at $2.4 trillion, largely influenced by the considerable variance in GDP between the two nations. Furthermore, the composition of these markets differs. In the US, government bonds constitute roughly two-thirds of the total market, while corporate bonds make up the remaining third. Conversely, Indian government bonds represent only about 45% of the market, with corporate bonds comprising around 50% and municipal bonds accounting for the remaining 5%.