New Delhi, Aug. 27 -- The Indian government borrowed at its lowest rate in 18 months this week, as foreign portfolio investors returned to rupee-denominated bonds with an appetite absent through most of 2026. The catalyst is not India-specific: Jerome Powell's signal at Jackson Hole that Fed rate cuts are coming has reset the cost of money across emerging markets, and India's sovereign debt market is moving faster than its equity counterpart.

now at 3.72% after Powell's Jackson Hole remarks - India's yield spread is near the lower end of its 12-month range, reflecting genuine institutional demand rather than short-term positioning.

FPI inflows into India's debt segment accelerated sharply after Jackson Hole. The five trading sessions be...