Rupee Bonds

More on India's tentative rupee bond, which now appears to be a purely cosmetic move:

http://businesstoday.intoday.in/story/ifc-move-to-internationalise-the-rupee-is-symbolic-at-best/1/199592.html

http://www.ifrasia.com/ifc-leads-offshore-rupee-push/21112772.article

The creation of an offshore market for rupee-denominated debt, however, may be one way for the government to increase the pool of potential buyers without relinquishing control over the local market.
Mexico, for example, began issuing peso bonds via Euroclear in 2010, syndicating the debt through foreign banks. Once an offshore benchmark issue was created, the sovereign would reopen it through auctions until the size and liquidity guaranteed inclusion into several indices.

So the Indian govt is then attempting to create a compartmentalized rupee-denominated debt instrument which can be insulated from conventional debt markets.This has led some to wonder aloud what would be appealing about this arrangement to lure others into putting their money into it:

http://www.ifrasia.com/samosa-bonds-india%E2%80%99s-answer-to-dim-sum/21112985.article

But having seen the damage which speculators had inflicted on the rupee you would have to wonder how investors will view the IFC’s proposed offering, which will be settled in US dollars but pay coupons and redeem subject to the dollar/rupee exchange rate.
COMPARE THAT PROPOSITION to investing in Dim Sum bonds, where the exposure is to a low-volatility renminbi, a unit that has been steadily appreciating against the dollar. There was no near 25% depreciation to countenance, something which potential offshore rupee investors will have to input into their risk assessment when looking at putting money into the proposed paper. It makes you think that investors would probably favour Samosa bonds more if the country were to restrict the currency more rather than open it up.
The IFC’s sales schtick on the subject has been to play up India’s long-term economic prospects, and since the IFC has US$4.5bn invested in India – more than in any other country in its portfolio – you could say that the World Bank’s private sector arm is putting its moneywhere its mouth is.

Perhaps the govt's attitude towards investors is "build it, and they will come" - however it's not clear how many will continue to be sucked in by endless sales pitches on "India's growth shtoree".