The signal
The IN–US 10-year spread has been compressing steadily — and it is doing more work for the rupee and for FII positioning than most equity investors register.
What it means
- For the rupee: the carry cushion is thinner, but the stability story is stronger
- For FIIs: Indian duration is back on the table as a real allocation, not a tactical trade
- For equities: the discount-rate tailwind arrives quietly, sector by sector
The watch-item
If the spread compresses below the historical band while inflation differentials hold, the re-rating math for long-duration equity gets genuinely interesting.
