Mumbai, September 25, 2026: India’s government borrowing programme is set to take centre stage on Friday as officials are expected to discuss and finalise the borrowing calendar for the second half of the financial year, a decision closely watched by the government bond market.
Reuters reported, citing two people familiar with the matter, that government officials were likely to meet on September 25 to finalise the October-March borrowing schedule, with an announcement expected after the meeting.
At the time of writing, the second-half calendar had not been officially announced. Therefore, details about the meeting and the composition of the upcoming borrowing programme remain expectations based on Reuters reporting rather than confirmed government decisions.
₹16.09 Lakh Crore Full-Year Borrowing Programme
The Government of India had initially budgeted gross market borrowing of ₹17.20 lakh crore for FY 2026-27.
However, government-security switches conducted after the Budget reduced planned gross market borrowing to ₹16.09 lakh crore, according to the Ministry of Finance.
Of this revised amount, ₹8.20 lakh crore, or approximately 51%, was scheduled to be raised during April-September through dated government securities.
The first-half programme was spread across 26 weekly auctions and included ₹15,000 crore of Sovereign Green Bonds.
Government borrowing during the period was distributed across securities with maturities of three, five, seven, 10, 15, 30, 40 and 50 years.
Source: Ministry of Finance / Press Information Bureau, Government of India.
₹7.96 Lakh Crore Could Remain for October-March
Reuters reported on September 18 that India had raised ₹7.79 lakh crore through bond sales at that stage.
With another ₹34,000 crore first-half auction scheduled for September 25, the report calculated that approximately ₹7.96 lakh crore of gross borrowing would remain for the October-March period.
That figure includes ₹6,500 crore that was not raised in a three-year government bond auction held on September 11.
The ₹7.96 lakh crore figure is consequently based on the existing ₹16.09 lakh crore annual borrowing programme and developments in previous auctions. The final structure and auction schedule for the second half will depend on the government's official borrowing calendar.
Source: Reuters, September 18, 2026.
₹34,000-Crore Bond Auction Scheduled for September 25
Friday is important for another reason.
The government's previously announced first-half borrowing calendar scheduled ₹34,000 crore of 10-year securities for the September 21-25 auction week.
The September 25 auction involves the reissue of the 6.94% Government Security 2036, which matures on May 11, 2036.
The government also has the option to retain additional subscriptions of up to ₹2,000 crore.
Settlement is scheduled for September 28.
This auction belongs to the existing first-half borrowing programme and is separate from the anticipated announcement of the October-March calendar.
Source: Government of India / Reserve Bank of India.
Investors Seek Changes in Bond Maturity Mix
Beyond the overall borrowing number, the maturity composition of government debt is emerging as an important issue for investors.
According to Reuters, most market participants consulted ahead of the borrowing plan favoured increasing the proportion of three-year and five-year government bonds.
The share of three- and five-year securities had already increased to 23.5% of issuance during April-September, compared with 16.6% a year earlier, Reuters reported.
These proposals are recommendations from market participants, not confirmed government policy.
Investors have also suggested reducing the amount of 10-year issuance or distributing the supply through two alternate-week auctions instead of conducting one sale every four weeks.
During April-September, ₹34,000 crore of 10-year securities was sold every four weeks, accounting for approximately 29% of total issuance, according to Reuters.
RBI Bond Sales Complicate the Equation
One factor potentially influencing the government's maturity decision is the Reserve Bank of India's liquidity-management strategy.
Reuters reported that the RBI announced open-market bond sales to absorb unusually high liquidity in the banking system following stronger-than-expected dollar inflows from diaspora deposits.
Some traders said those operations complicated earlier preferences for increasing shorter-maturity government bond issuance.
One trader quoted by Reuters said:
“Open market sales were not on the minds of the majority during those meetings, but they are now a bitter reality.”
The trader added that increasing supply in the same segment could distort the yield curve and increase short-term government borrowing costs.
These comments represent the assessment of an unnamed market participant and not an official RBI or government position.
Ultra-Long Bonds Also Under Discussion
The other end of India's yield curve is attracting attention as well.
Reuters reported that some market participants recommended increasing the share of ultra-long government bonds with maturities ranging from 30 to 50 years.
Their share had fallen to around 25% of total borrowing, compared with approximately 35% a year earlier.
Long-dated securities can appeal to institutional investors such as insurance companies and pension funds that need assets matching long-term liabilities.
However, the final maturity distribution will only become clear once the government releases the official second-half calendar.
Treasury Bills Could Also Attract Attention
Investors are also watching whether the government adjusts issuance of short-term Treasury bills.
Reuters reported that ultra-short Treasury bills have experienced stronger demand than dated government securities.
Market participants will therefore be looking for signs of whether the ₹6,500 crore left unraised from the September 11 auction could be incorporated into the second-half financing programme and how the government chooses to distribute its funding requirements.
Why the Borrowing Calendar Matters to Markets
Government borrowing calendars are closely followed because they tell investors how much sovereign debt the market will need to absorb and when that supply will arrive.
A large concentration of bonds within a particular maturity can affect yields in that segment, particularly if additional supply exceeds available investor demand.
Government securities also form an important benchmark for pricing debt throughout India's financial system. Changes in sovereign yields can therefore influence borrowing conditions beyond the government bond market.
The issue also sits within the Centre's wider fiscal framework. The government has targeted a fiscal deficit of 4.3% of GDP for FY 2026-27, while the estimated central government debt-to-GDP ratio stands at 55.6% in the Budget Estimates.
The government's medium-term fiscal strategy aims to move the debt-to-GDP ratio toward 50±1% by FY 2030-31.
Source: Ministry of Finance / Union Budget 2026-27.
What Markets Will Watch Next
Attention will now turn to the official second-half borrowing calendar.
Investors will be looking particularly at the total October-March borrowing amount, weekly auction sizes, allocation between short- and long-maturity securities, the treatment of the ₹6,500-crore shortfall from September and the interaction between fresh government issuance and RBI liquidity operations.
Until the government or RBI publishes the final calendar, the proposed maturity changes remain market recommendations rather than confirmed policy.
Sources
Primary official sources: Ministry of Finance and Press Information Bureau, Government of India — FY 2026-27 borrowing programme and fiscal policy documents; Reserve Bank of India — government securities auction information.
News source: Reuters, September 18, 2026 — reporting by Dharamraj Dhutia and Shubham Batra on the expected September 25 meeting, remaining borrowing requirement and market consultations.
