NEW DELHI: The government and Reserve Bank of India (RBI) will finalise plans for the country’s first overseas sovereign bond issue by September when the Centre’s second quarter borrowing programme is finalised, finance secretary Subhash Chandra Garg said on Saturday.He asserted that India would command rates comparable with major countries despite its credit rating being lower than several emerging markets.“The policy announcement has been made that India will be issuing sovereign bonds. For many years we were debating, now the government has taken a call,” Garg told TOI in an interview.“It also clearly says that a part of the normal borrowing programme will be raised in foreign currencies and in foreign markets . That is the policy. How much to raise, in which markets to raise, when to raise, should it be one issue of bonds or more than one are all questions which we will now determine,” the finance secretary said.The move to raise funds overseas using the sovereign borrowing route marks a dramatic shift in the country’s economic policy. While the issue has been debated and discussed for long, successive governments had shied away from taking the plunge. The issue of sovereign bonds opens up a funding route for the government at a time when it is faced with a funds crunch and has to stick to a fiscal consolidation roadmap.“There are a number of countries which have issued sovereign bonds like China, the Philippines, and Malaysia. We will get much better rates than them. There is a really good demand for Indian paper,” said Garg.The finance secretary said the government had undertaken a feedback exercise and is confident of getting a good deal for Indian sovereign bonds and said there would be no impact of the low sovereign credit rating.Overseas money markets are flush with funds and are on the lookout for better returns for their investment and officials say India provides an opportunity for their investment to fetch better returns. Some experts have attributed the decision to the government’s confidence over the country’s economic prospects.“There is so much demand for Indian paper. Even our sub-sovereigns issues such as Exim bank, PFC, IRFC get reasonable rates, comparable to other sovereigns,” said Garg.In 2017, Moody’s upgraded the country’s local and foreign currency issuer ratings to Baa2 from Baa3, the first time in 13 years, and changed the outlook to stable to positive.The government’s decision to include the sovereign bond issue as part of its overall borrowing programme will also ease pressure on the domestic markets and could help in RBI’s efforts to bring down interest rates. High government borrowing crowds out the private sector and is a factor behind tight interest rates.Garg said several protocols have to be followed and documentations have to be completed before entering the global bond mark. “This is a process which takes time when you do it for the first time.”