Reliance Industries Ltd has become the first company to benefit from the decision by Moody’s Investors Services to upgrade India’s credit rating. It has raised $800 million at 1.35 percentage points over US treasuries. The money will be used to refinance an earlier loan.

Is it time for the government to go in for a sovereign bond issue? India does not need any foreign exchange right now. In fact, the central bank is struggling to mop up the excess dollars flowing into the country. The reason why a few sovereign bonds of different maturities could make sense is that the pricing can act as a benchmark for Indian corporate borrowing in international bond markets, so the sovereign bond need not be for a large amount of money.

Countries such as Argentina, Iraq and Greece have had successful sovereign bond issues in recent months. These nations have hardly been paragons of public finance virtue, so there is no reason why India cannot use the opportunity to sell a sovereign bond to develop a benchmark for dollar borrowing by Indian companies.