In Mumbai, a rise in bond yields, attributed to increased oil prices and tensions in West Asia, has opened up investment opportunities in debt schemes. The yield on the benchmark 10-year government bonds increased from 6.67% to 7.12%, before settling at 6.97% on April 9 due to inflation concerns. Money managers recommend short-term debt funds, particularly those investing in bonds maturing in 2-3 years, as they are well-positioned to benefit from the current yield environment. The Reserve Bank of India (RBI) has kept interest rates unchanged, suggesting a pause in further easing, which could maintain elevated bond yields. Investors are encouraged to focus on corporate bond funds and short-term bond funds, which currently yield between 7.5% and 7.6%. Additionally, if inflation persists, the RBI may raise the repo rate by 25-50 basis points later this year, which could pressure long-duration bond prices. For those with a higher risk appetite, investing in gilt funds that target long-term government securities may be considered if yields exceed 7.75%.