CEA Warns Rising Global Yields and US Uncertainty Could Reduce India's Capital Inflows

The Chief Economic Adviser (CEA) issued a warning today that rising global bond yields, coupled with uncertainty in the United States, may curb capital inflows into India. The CEA noted that higher yields on developed‑market debt instruments make foreign investors less inclined to seek returns in emerging markets. Additionally, the adviser highlighted a growing artificial‑intelligence gap between India and leading economies, which could affect the country’s attractiveness to tech‑focused investors. "These factors together could reduce the net inflow of foreign capital," the CEA said, urging policymakers to consider measures that enhance India’s competitiveness and stability. The warning comes as global markets grapple with inflationary pressures and shifting monetary policy.