What Just Happened?
The Reserve Bank of India, acting on behalf of the Government of India, announced the sale (re-issue) of two dated government securities for a combined notified amount of ₹29,000 crore. This auction, scheduled for April 2, 2026, offers investors a chance to buy into long duration sovereign bonds backed by the full faith and credit of the Indian government.
Let us break down exactly what this means for you as an NRI investor.
The Two Securities on Offer
| Detail | Security 1 | Security 2 | |---|---|---| | Coupon Rate | 6.68% | 7.43% | | Designation | GS 2040 | GS 2076 | | Maturity Date | July 7, 2040 | January 19, 2076 | | Notified Amount | ₹17,000 crore | ₹12,000 crore | | Auction Date | April 2, 2026 (Thursday) | April 2, 2026 (Thursday) | | Settlement Date | April 6, 2026 (Monday) | April 6, 2026 (Monday) |
The Government of India also retains the option to accept additional subscriptions of up to ₹2,000 crore against each security. This means the total issuance could go up to ₹33,000 crore if demand is strong.
Why Should NRIs Care About This Auction?
Direct Access Through the Fully Accessible Route (FAR)
The official annex to this notification explicitly states that investments by non-residents are subject to the guidelines on the Fully Accessible Route (FAR) for investment by non-residents in Government Securities. Under FAR, there are no investment ceilings for NRIs investing in specified government securities. This removes the quota based restrictions that previously limited foreign participation in Indian sovereign debt.
This means you can participate in this auction without worrying about aggregate caps or needing to compete for limited foreign investor allocations.
Attractive Yields on Sovereign Debt
The 6.68% GS 2040 offers roughly 14 years of remaining maturity, while the 7.43% GS 2076 is an ultra long bond with about 50 years to maturity. For NRIs looking to lock in Indian rupee denominated returns with zero credit risk (these carry sovereign guarantee), these securities deserve serious consideration.
The 7.43% coupon on the 2076 bond is particularly noteworthy. Ultra long sovereign bonds at this yield level can serve as a powerful portfolio diversification tool, especially if you expect Indian interest rates to trend lower over time, which would push the market price of these bonds higher.
Interest Payment Schedule
Interest on these government securities will generally be paid half yearly. The exact periodicity is mentioned in the specific notification for each security issue.
How the Auction Works
Auction Method
This auction uses the multiple price method. Since both securities are re-issues (not new issuances), the auction will be price based. Successful bidders will get allotment at the price they individually quoted, not at a single uniform cut off price.
Two Ways to Bid
Competitive Bids: You quote a specific price at which you want to buy. If your price is at or above the minimum price that RBI determines, your bid gets accepted at your quoted price. You can submit competitive bids between 10:30 a.m. and 11:30 a.m. on April 2, 2026.
Non-Competitive Bids: You agree to buy at whatever weighted average price emerges from the competitive auction. This is simpler and works well if you just want allocation without worrying about pricing strategy. Non-competitive bids must go in between 10:30 a.m. and 11:00 a.m. on April 2, 2026.
Up to 5% of the notified amount for each security is reserved for eligible individuals and institutions under the Non-Competitive Bidding Facility.
Minimum Investment
The minimum bid size is ₹10,000 (nominal value), and you can bid in multiples of ₹10,000 after that. This makes government securities accessible even for smaller investors.
RBI Retail Direct Portal
Individual investors, including NRIs who have opened an RBI Retail Direct account, can place non-competitive bids through the Retail Direct portal at [https://rbiretaildirect.org.in](https://rbiretaildirect.org.in). This platform has made it significantly easier for retail and NRI investors to participate directly in government securities auctions without going through a bank or primary dealer.
Submission Platform
All bids must be submitted electronically through the RBI Core Banking Solution (E-Kuber system). Physical bids will not be accepted except in extraordinary circumstances involving system failure.
When Issued Trading Window
These securities are eligible for "When Issued" trading from March 30, 2026 to April 2, 2026. This means you can trade these bonds in the secondary market even before the auction settles, which helps with price discovery and gives you flexibility to take positions ahead of the actual auction.
Investment and Market Impact Angle
What This Signals for Indian Bond Markets
A ₹29,000 crore issuance (potentially ₹33,000 crore with the greenshoe option) is a substantial supply event. For NRIs already holding Indian government bonds or bond mutual funds, watch how the market absorbs this supply. Strong demand at favorable prices would signal continued appetite for Indian sovereign debt, which is positive for existing bond holdings.
Impact on Bond Mutual Funds and ETFs
If you invest in Indian gilt funds, long duration debt mutual funds, or government bond ETFs, these securities will likely find their way into those portfolios. The 7.43% GS 2076, being an ultra long bond, is particularly relevant for long duration gilt funds. The auction outcome (cut off yields) will directly influence the NAV of these funds.
Currency Considerations for NRIs
Remember that your total return from Indian government securities includes both the coupon income and any currency movement between the Indian rupee and your home currency. A 6.68% or 7.43% coupon looks attractive compared to many developed market sovereign yields, but factor in your rupee view before committing.
Repo Eligibility
Both securities are eligible for repurchase transactions (repo) as per the RBI's Repurchase Transactions (Repo) Directions, 2018. This means institutional holders can use these bonds as collateral for short term borrowing, which adds to their liquidity and attractiveness.
Key Dates to Remember
| Event | Date | |---|---| | When Issued trading begins | March 30, 2026 | | Auction day | April 2, 2026 (Thursday) | | Non-competitive bid window | 10:30 a.m. to 11:00 a.m. | | Competitive bid window | 10:30 a.m. to 11:30 a.m. | | Result announcement | April 2, 2026 (same day) | | Settlement | April 6, 2026 (Monday) |
Practical Steps for NRI Investors
1. Open an RBI Retail Direct account if you have not already. This gives you direct access to government securities auctions. 2. Ensure your NRE or NRO account is funded and linked appropriately for settlement. 3. Decide between competitive and non-competitive bidding. If you are not a professional bond trader, non-competitive bidding is simpler and guarantees allocation (within the 5% reserved portion). 4. Consider your investment horizon. The 2040 bond suits a medium to long term view, while the 2076 bond is for those comfortable with ultra long duration exposure. 5. Check the specific notification (F.No.4(1)-B(W&M)/2026 dated March 28, 2026) and the General Notification (F.No.4(2)-B(W&M)/2018 dated March 26, 2025) for complete terms and conditions.
Contact Information for Technical Issues
If you face difficulties during the auction process:
- Public Debt Office, Mumbai: 022-22603456, 022-22603457, 022-22603190
- Core Banking Operations Team: 022-69870466, 022-69870415
- IDMD Auction Team: 022-22702431, 022-22705125
Source Reference
This article is based on RBI Press Release 2025-2026/2343 dated March 28, 2026, issued by Ajit Prasad, Deputy General Manager (Communications), Reserve Bank of India.