New Delhi, July 22 -- Borrowing costs in the bond market could increase in the coming months as upside risks to India's 10-year government bond yield continue amid an uncertain macroeconomic environment, according to a report by Bank of Baroda (BoB).

The report said the outlook for India's 10-year government bond yield remains uncertain and will depend on evolving global conditions, including war-related developments, liquidity conditions, inflation and government borrowing.

It noted that the Reserve Bank of India's current rate cycle is likely to remain cautious even if there is no rate hike. As a result, the report expects upside risks to India's 10-year bond yield to continue.

"In that case, coupled with uncertain macro conditions t...