The time honoured principles that underlie opening up of debt markets to foreign investment are convergence in nominal and real interest rates on sustainable basis, low debt/GDP ratio and low fiscal deficit to GDP ratios on a consistent basis.
In case of sovereign borrowing, given the huge market borrowing requirements, there will be increased susceptibility to global market developments and rating changes if there is increased participation of foreign investors. In the recent market turmoil, while the private sector did feel the adverse impact of worsening global credit conditions, the sovereign borrowing program was largely unaffected from direct impact on this count.