The following table shows comparison of 10-year bond yields of major countries
Link to the above table.
Why do you think that India’s economy is comparable with those other countries listed in table? India is a developing country.
Those countries come above and below our GDP (see table below). Size of an economy is measured in GDP right?
If GDP isn’t the right parameter to use here, what else do you suggest?
maybe you can compare with the countries with similar inflation…
Try GDP per capita.
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Those developed countries inflation is around less than 1% and hence less than zero interest rates.
India’s inflation is around 6%, so higher interest rates hence higher bond yield.
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it is mainly due to inflation. Different countries has different levels of inflation and this is reflected in the yeilds. Inflation also has a direct impact on the exchange rate between two currencies
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Per Capita GDP would be good starting point. We are county of 1.3 billion, so every number in absolute looks very huge, but per capita it comes out as peanuts.
Besides, as rightly pointed out by so many people, interest rates are largely dependent on inflation. And lot of these developed economy are very mature and very low inflation. They have abundance of capital. So interest rates are negligible (Some are actually having negative rate)
On other hand, we are still developing country, capital is scarce and inflation is high. So interest rate is high too.