India unlikely to offer tax sops for first sovereign green bond issue - source

Nov 3, 2022

Synopsis
The plan to issue green bonds was first discussed by Finance Minister Nirmala Sitharaman in the 2022/23 budget as a part of overall market borrowing with the intention to use the funds to build green infrastructure.The government intends to issue 160 billion rupees ($1.93 billion) of green bonds between October and March.

India's government is unlikely to offer any tax concessions to attract investors to its first issue of sovereign green bonds, a senior government official told Reuters on Thursday.

Despite that, it expects the bonds to be sold at a lower coupon rate than other government securities.

The plan to issue green bonds was first discussed by Finance Minister Nirmala Sitharaman in the 2022/23 budget as a part of overall market borrowing with the intention to use the funds to build green infrastructure.

The government intends to issue 160 billion rupees ($1.93 billion) of green bonds between October and March.

"Green bonds will not offer any incentives or tax concessions and we expect the cost of borrowing through green rupee denominated bonds to be reasonably lower than through G-secs (government securities)," the official, who did not want to be named, said.

The benchmark 10-year yield was at 7.4616% as of 0751 GMT, after ending at 7.4044% on Wednesday.

[The Economic Times]