Summary of Key Points Core Viewpoint - The foreign portfolio investors (FPIs) have experienced significant outflows from Indian debt, primarily due to a weakening rupee and geopolitical tensions in West Asia, leading to a negative sentiment in the market [1][4][10]. Group 1: Market Trends - In March alone, FPIs sold ₹17,686 crore worth of debt, marking the largest monthly outflow of the year [1][4][10]. - The rupee has declined over 11% in the current fiscal year, while bond yields have risen by 55 basis points, making Indian assets less attractive to global investors [4][10]. Group 2: Economic Outlook - Economists predict that flows into Indian bonds will remain muted in FY27 due to ongoing Gulf conflict, a weakening rupee, and more attractive pricing of US bonds [2][10]. - Concerns over fiscal slippage following recent cuts in excise duty on petrol and diesel have further weakened sentiment for Indian bonds amid inflationary expectations and potential supply glut [2][10]. Group 3: Future Inflows - A significant trigger, such as the inclusion of Indian debt in a global bond index, is necessary for a meaningful pickup in inflows [7][10]. - Despite the outflows, FPIs did not offload Indian bonds as aggressively as equities, indicating some level of confidence in the bond market [7][10].