Government swaps ₹11,302 crore of bonds for longer-term debt

Economy No. 94 24 October 2026 · 1 min read · By Pranami Hayaran

On 19 October, the government swapped ₹11,302 crore of bonds due between 2027 and 2029 for bonds worth ₹11,651 crore due as late as 2060.

The government appears to owe ₹349 crore more, but the swap was based on market prices. Bondholders were compensated according to the prices of the old and new bonds, so the higher face value does not mean the government simply gave away money.

The main benefit is more time to repay. The average repayment period increased from 1.7 years to 14.1 years. The trade-off is slightly higher annual interest payments, rising from ₹825 crore to ₹839 crore.

Investor interest was limited. Only 56.5% of the ₹20,000 crore offered was swapped. Nobody agreed to swap the ₹4,000 crore of bonds due in January 2029.

In simple terms, the government has pushed some repayments further into the future, giving itself more time to pay back its debt.

Five pairs of bars, years to repayment of the old bond beside the new bond it was switched into: every new bar is taller, from 6.7 to 33.9 years against 0.8 to 3.2, the 2027 into 2060 pair by far the most.

Five pairs of bars, the old bond taken back beside the new bond issued: the new bar is taller for 4 pairs, most for 2027 to 2060, and shorter for 2029 to 2033.

One bar for ₹20,000 crore split into ₹11,302 crore switched, ₹2,747 crore offered but not accepted and ₹5,951 crore never offered.

Sources