IMPORTANT: THIS IS NOT A PORTFOLIO MODEL. This tracker measures the US-India yield differential and capital flow dynamics. It does not forecast yield direction or currency movements. It is general and impersonal. AhaSignals is not a registered investment adviser. For investment decisions, consult a qualified financial professional.
US-INDIA YIELD GAP TRACKER · 2026
US-India Yield Gap Tracker 2026: Treasury vs India Bond Spread, RBI-Fed Divergence & Capital Flow Analysis
The US-India 10Y yield gap is a key indicator of EM capital flow dynamics, INR direction, and global fixed-income allocation. India yields trade significantly above US Treasuries — driven by oil price sensitivity, RBI policy, fiscal deficits, and the transformative impact of JPMorgan bond index inclusion.
QUICK ANSWER · AS OF Apr 8, 2026
What is the US-India 10Y yield gap in 2026?
The US-India 10Y yield gap is -261 basis points as of Apr 8, 2026. The US 10Y Treasury yields 4.31% while the India 10Y government bond yields 6.92%. The gap is negative because India yields are above US yields. Regime: india premium narrowing — convergence. UIYG stress score: 0/100 (LOW).
US-India Gap
-261bps
US 10Y
4.31%
India 10Y
6.92%
UIYG
0/100 (LOW)
India premium of 261bps is 19bps narrower than the 5-year average of -280bps. Gap velocity: +15bps/30d. Oil prices and RBI easing cycle are the dominant forces. USD/INR at 87.5.
UIYG 0/100 — US-India gap at -261bps — India yields 261bps above US, india premium narrowing
US-India Gap
-261bps
India 10Y
6.92%
Regime
India Premium Narrowing
UIYG Score Breakdown
US-China gap at -3bps (5y avg: -3bps, above by 0bps).
Gap moved +0bps in 30 days (widening).
Gap magnitude: 3bps. Elevated — significant policy divergence.
Current Yield Comparison
US 10Y Treasury
4.31%
10Y Gap
-261bps
India yields above US
India 10Y Gov Bond
6.92%
Source: U.S. Treasury, RBI, TradingView IN10Y, ainvest.com. As of Apr 8, 2026. Gap is negative because India yields exceed US yields.
Gap Metrics
5Y Avg Gap
-280bps
30D Change
+15bps
Narrowing (less negative)
52W Widest
-320bps
2025-08-10
52W Narrowest
-210bps
2026-02-15
Gap 30 days ago: -276bps · Current: -261bps · Direction: Narrowing
Yield Gap Regime Map
Maximum divergence — India premium above 5Y average and still expanding. Oil-driven inflation, fiscal supply pressure, or RBI hawkishness pushing India yields higher relative to US.
India premium above average but compressing — early convergence signal. RBI easing, index inclusion flows, or US yields rising to close the differential.
India premium below average but expanding — divergence building. Oil price spikes or fiscal concerns pushing India yields higher.
Convergence regime — India premium below average and compressing. RBI cuts, foreign inflows via index inclusion, and stable oil prices supporting convergence.
Current Regime Narrative
The India-US yield gap is narrowing as India 10Y yields have risen on oil price concerns (India is a major oil importer) while US yields have stabilized. The -261bps gap (India above US) is narrower than the 5-year average of -280bps. RBI has cut rates 100bps but bond yields have risen due to oil-driven inflation fears and fiscal supply concerns. India's inclusion in global bond indices (JPMorgan GBI-EM) is attracting foreign flows but not enough to offset domestic pressures.
Historical frequency: 30% of months since 2015 · Avg duration: 8 months
Yield Gap Drivers
India imports ~85% of its oil. Rising oil prices (WTI ~$89) increase India's current account deficit and inflation, pushing bond yields higher and widening the gap.
RBI has cut rates 100bps in 2025-26 easing cycle. Further cuts would pull India yields lower, narrowing the gap.
India's inclusion in JPMorgan GBI-EM index is attracting ~$25B in passive foreign flows over 2024-2026, compressing yields.
India's fiscal deficit (~5.1% of GDP) creates large government borrowing needs, adding supply pressure to the bond market.
Historical Yield Gap Events
| Date | Gap | Event |
|---|---|---|
| 2018 | -350bps | EM selloff — India yields spiked |
| 2020 | -200bps | COVID — gap compressed |
| 2023 | -250bps | JPMorgan index inclusion announced |
| Q1 2026 | -261bps | Oil surge + RBI cuts — mixed signals |
Sources: U.S. Treasury, RBI, TradingView IN10Y, FRED DGS10. Historical gap values are approximate daily observations.
Macro Context
Fed Funds
3.50–3.75%
RBI Repo Rate
5.5%
USD/INR
87.5
DXY
97.5
The US-India yield gap reflects fundamentally different macro environments. India faces oil-driven inflation pressure (CPI ~5%) requiring elevated rates, while the US has moderating inflation (~2.8%). The RBI repo rate at 5.50% vs Fed at 3.50-3.75% creates a 175bps policy rate gap. India's bond market is transitioning from a domestic-dominated market to one with growing foreign participation via index inclusion.
Data Freshness
| Source | Cadence | Lag | As Of |
|---|---|---|---|
| US 10Y (Treasury) | Daily | ~24 hours | Apr 8, 2026 |
| India 10Y (RBI/TradingView) | Daily | ~24 hours | Apr 8, 2026 |
| Yield Gap | Calculated daily | ~24 hours | Apr 8, 2026 |
Methodology
The US-India Yield Gap Index (UIYG) measures structural stress in the US-India 10Y yield differential. The gap is negative because India yields are above US yields:
- Gap Deviation (40%): How far the current gap deviates from its 5-year average. Score = min(|current_gap − avg_gap_5y| / 1.5 × 100, 100). A 150bps deviation = score of 100.
- Gap Velocity (35%): How fast the gap is changing over 30 days. Score = min(|gap_30d_change| / 0.5 × 100, 100). A 50bps change in 30 days = score of 100.
- Extreme Signal (25%): Penalty for extreme gap magnitude. Score = min(|current_gap| / 3.0 × 100, 100). A 300bps gap = score of 100.
Composite = Σ(weight × score), rounded. Signal thresholds: LOW <25, ELEVATED 25–49, HIGH 50–74, CRITICAL ≥75.
Version: v0.1-beta. Known limitations: (1) Uses end-of-day yields, not intraday; (2) 5-year average gap is approximate; (3) Does not model capital flow volumes directly; (4) India bond yields may reflect RBI intervention and government borrowing calendar effects; (5) Oil price transmission to India yields has variable lag.
Research and educational purposes only. Not investment advice.
Frequently Asked Questions
What is the US-India yield gap? ▾
How do oil prices affect India bond yields? ▾
How does RBI policy compare to the Fed in 2026? ▾
What is the impact of JPMorgan index inclusion on India bonds? ▾
How does the US-India yield gap affect the Indian rupee (INR)? ▾
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📎 Cite This Data ▾
APA 7th Edition
AhaSignals. (2026). US-India Yield Gap Tracker (UIYG). Retrieved April 18, 2026, from https://ahasignals.com/us-india-yield-gap-tracker/
Methodology: v0.1-beta
Data as-of: Apr 8, 2026
Research purposes only. Not investment advice. All index inputs from free, public, clickable sources.
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Research and educational purposes only. Not investment advice. Data may be delayed. See methodology · terms · privacy.