To grow the market, financial products must reach beyond metro cities and go deeper into Bharat
Today, when we talk about derivatives and tokenisation, the bigger question is: how do we expand and deepen India’s financial markets?
Speaking at the India Fixed Income Summit, on May 26, 2026, organised by CNBC-TV18 in association with IndiaBonds, AK Mittal, MD and CEO at AK Capital Services, shared his views on the History of the Indian Bond Market & Way Forward.
Mittal said, "If we look at the numbers, India’s economy is around USD 3.95 trillion, compared with USD 31.86 trillion for the US and USD 20.4 trillion for China. But when it comes to corporate bonds, India’s market is only around USD 0.64 trillion, while the US is at USD 11.55 trillion and China at USD 11.15 trillion."
He said that, as a share of GDP, India’s corporate bond market remains very small. Municipal bonds are another example, India has only around USD 0.5 billion, compared with trillions in the US and China.
The issue is not that India is borrowing too much, rather, many who have the capacity to borrow are not doing so. Borrowing, if productive, helps markets grow, he said.
He also emphasised on the savings rate in India. Another concern is savings. Countries such as China save nearly 40 percent of GDP, while India’s savings rate is lower. Also, whatever savings are happening are not always flowing into productive assets like bonds; instead, a lot goes into real estate and gold.
To grow the market, financial products must reach beyond metro cities and go deeper into Bharat. Debt distribution needs to expand. Today, many savers feel discouraged because inflation reduces real returns. If inflation is around 4 percent and bank deposits give around 5 percent before taxes and deductions, real gains remain limited, he said.
He also said that the bond market can potentially provide better inflation-adjusted returns. If investors can directly participate, efficiencies improve and savings become more productive.
MSMEs continue to face high borrowing costs, sometimes 12 percent to 20 percent or more, which makes growth difficult. Manufacturing needs capital, and efficient debt markets can support that.
So, if India wants to become a developed economy, it needs stronger savings mobilisation and a broader bond market that reaches smaller towns and regions, not just large urban centres.
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