NIFTY 10-Year G-Sec Index

The NIFTY 10-Year G-Sec Index is a fixed income benchmark published by NSE Indices Limited that tracks the total return performance of the on-the-run 10-year benchmark Government of India (GoI) security. The on-the-run benchmark is the most recently issued 10-year central government bond, which trades with the highest liquidity among all GoI securities. The index represents the pure sovereign credit risk-free segment of the Indian fixed income market and is used as the benchmark for gilt mutual fund schemes, long-duration debt funds, and other investment products with exposure to the long end of the Indian yield curve.

Publisher and base data

• Publisher: NSE Indices Limited
• Base date: 31 December 2001
• Base value: 100
• Constituent structure: The index is a single-security or rolling-benchmark index, tracking the prevailing on-the-run 10-year Government of India bond.

What is the on-the-run 10-year G-sec?

The Government of India, through the Reserve Bank of India (RBI) acting as debt manager, periodically issues new 10-year fixed rate sovereign bonds via auctions (both primary and secondary market). At any given time, the on-the-run 10-year G-sec is the most recently issued 10-year bond, identified by its coupon rate, ISIN, and maturity date (which will be approximately 10 years from the issue date). It becomes the market benchmark because:

• It has the highest outstanding stock of any 10-year bond (following multiple re-issuances through the uniform price auction process).
• It is the most actively traded G-sec in the secondary market (NDS-OM platform).
• Yield of the on-the-run 10-year bond is the most commonly quoted reference for the “risk-free rate” in Indian financial markets.
• Derivative instruments, including interest rate swaps and government bond futures, are typically priced relative to this benchmark.

When a new 10-year bond is issued and becomes more liquid than the previous benchmark, the index “rolls” to the new security, incorporating appropriate adjustment for the transition.

Index methodology

• Index type: Total return (price change + coupon accrual).
• Valuation: Daily closing price from NDS-OM (Negotiated Dealing System – Order Matching), the electronic platform operated by the Clearing Corporation of India Limited (CCIL) for government securities transactions.
• Duration: The modified duration of the index reflects the current on-the-run 10-year G-sec’s duration, typically in the range of 7.5-8.5 years (since a 10-year bond with recent issuance has a duration somewhat below 10 years due to coupon payments).
• Roll mechanism: When the RBI issues a new 10-year benchmark, the index transitions to the new security with an adjustment factor to maintain continuity.
• Coupon treatment: Semi-annual coupon payments are reinvested at the prevailing market price.

Interest rate sensitivity

With a modified duration of 7.5-8.5 years, the NIFTY 10-Year G-Sec Index is among the most interest-rate-sensitive Indian fixed income benchmarks:

• A 100 basis point rise in the 10-year yield reduces the index level by approximately 7.5-8.5%.
• A 100 basis point fall in the 10-year yield increases the index level by approximately 7.5-8.5%.

This high duration makes the index and funds benchmarked against it appropriate only for investors with a long investment horizon (3-10+ years) and a specific view on falling long-term interest rates. Short-term investors may experience significant capital losses during yield-rise episodes.

Historical returns and yield context

The 10-year Government of India yield has moved in wide bands over the past two decades:

Approximate total return CAGR of the NIFTY 10-Year G-Sec Index:

The wide range in shorter-period returns reflects the mark-to-market impact of yield movements. Periods of significant yield compression (2014-16, 2019-21) produced 10-12% total returns; periods of yield rise produced 3-6% or negative returns.

Inclusion in global bond indices

A significant development for the NIFTY 10-Year G-Sec and the broader Indian G-sec market has been India’s inclusion in global bond indices. JP Morgan announced in September 2023 that Indian government bonds would be included in its GBI-EM Global Diversified Index from June 2024, with India reaching a maximum weight of 10% by March 2025. Bloomberg Barclays and FTSE Russell have also included or announced inclusion of Indian G-secs. This has brought systematic foreign portfolio investment inflows into the 10-year G-sec, increasing its integration with global fixed income markets.

Mutual fund usage

The NIFTY 10-Year G-Sec Index is used as the benchmark for:

• Gilt funds (long-term): SEBI-defined category investing exclusively in government securities across maturities, often with significant allocation to the 10-year segment.
• Long duration funds: funds targeting Macaulay duration above 7 years.
• Constant maturity gilt funds (10-year): dedicated products that maintain approximately 10-year duration by rolling positions in the on-the-run benchmark. Examples: SBI Magnum Constant Maturity Fund, HDFC Gilt Fund (Long Term), Nippon India Gilt Securities Fund.

See also

• NIFTY 5-Year G-Sec Index
• CRISIL Composite Bond Fund Index
• CRISIL Short-Term Bond Fund Index
• Mutual fund
• National Stock Exchange of India

References

1. NSE Indices Limited. “NIFTY G-sec Index Series Methodology.” niftyindices.com. Accessed 2026.
2. Reserve Bank of India. “Government Securities Market in India – A Primer.” rbi.org.in. 2025.
3. Clearing Corporation of India Limited (CCIL). “NDS-OM trading statistics.” ccilindia.co.in. 2025.
4. JP Morgan. “GBI-EM Global Diversified India Inclusion Announcement.” September 2023.
5. AMFI. “Gilt and long duration fund benchmark data.” amfiindia.com. 2025.