G-Sec, short for Government Securities, refers to debt instruments issued by the central or state government to borrow money from the public and financial institutions, in order to fund government spending. Because they're backed by the government itself, G-Secs are considered among the safest investments available, with virtually no risk of default.
Individual investors can buy G-Secs directly through the RBI's Retail Direct platform, or indirectly through debt mutual funds that hold a portfolio of government securities. G-Sec prices and yields (their effective interest rate) move inversely — when interest rates in the economy rise, existing G-Sec prices tend to fall, and vice versa. They're a useful building block for conservative investors seeking stable, predictable returns with minimal credit risk, though returns are usually modest compared to equity.
For most retail investors, the simplest way to gain exposure to G-Secs is indirectly, through gilt mutual funds or debt funds that hold a diversified basket of government bonds on your behalf.