The National Stock Exchange of India (NSE) has received a No Objection Certificate (NOC) from the Securities and Exchange Board of India (SEBI) to introduce futures contracts on a Corporate Bond Index, marking a step towards expanding India’s corporate bond derivatives market.
The proposed product will provide market participants with an exchange-traded avenue to manage corporate bond market risk, hedge portfolios, and improve price discovery. The launch, however, remains subject to the requisite approval from the Reserve Bank of India (RBI).
What is Corporate Bond Index Futures, and how will it help?
Corporate bond index futures are exchange-traded derivative contracts that track a portfolio or index of corporate debt securities.
Corporate bond index futures are expected to complement the expanding corporate bond market by providing investors and other market participants with another means of managing their exposure to corporate debt.
The product could also be used for portfolio hedging and risk management, enabling participants to manage market risk arising from their corporate bond holdings without being obliged to change their underlying portfolios.
The NSE states that futures contracts could also aid the development of market making by giving participants a way to manage the risks associated with their corporate bond portfolios.
NSE aims to deepen India’s fixed-income market
The proposed initiative is part of NSE’s broader efforts to deepen India’s fixed-income markets and expand the range of exchange-traded risk-management products available to market participants.
Sriram Krishnan, Chief Business Development Officer at NSE, said the SEBI NOC marks an important milestone in the evolution of India’s fixed-income markets.
He said a well-developed derivatives ecosystem can strengthen the underlying corporate bond market by enabling more efficient risk transfer and supporting greater institutional participation.
“This initiative reflects NSE’s continued commitment to building deeper, more liquid and resilient debt markets in India,” Krishnan said.
What happens next?
While the SEBI NOC clears a key regulatory step, the proposed Corporate Bond Index Futures will require RBI approval before their introduction.
If approved, the product would add another exchange-traded instrument for managing corporate bond exposure and could contribute to the development of a broader corporate bond derivatives ecosystem in India.
How has the bond market grown in India over the years?
According to Reuters, India’s bond market has expanded steadily over the years, with both government and corporate debt attracting greater participation from domestic and overseas investors. Indian companies raised a record ₹4.07 trillion through bonds in the first four months of FY26, underscoring the growing importance of the corporate bond market as a source of funding.
Reuters also reported that foreign participation in government debt received a boost after Indian bonds were included in JPMorgan’s emerging-market debt index in June 2024, a move that was expected to attract at least $20 billion in inflows over the following 10 months.
More recently, foreign investors have poured nearly $6.5 billion into Indian government bonds since June 2026, while companies have continued to tap the rupee bond market to meet their funding requirements, according to Reuters.
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