India’s 1-Y government bond yield decreased to around 7.15% in January, the lowest in nearly four months. This drop is attributed to positive macroeconomic developments and corporate news boosting bond demand. The potential inclusion of Indian bonds in Bloomberg’s emerging market local currency index, following JPMorgan’s inclusion, is expected to increase foreign demand, leading to lower yields. Despite a recent rise in headline inflation, private bank reports of slowing core inflation have fueled expectations of possible rate cuts by the central bank. However, the bank is likely to continue its Withdrawal Accommodation policy.