[Alpha Biz= Reporter Kim Sangjin] According to the Financial Times on June 27 (local time), over $40 billion worth of Indian government bonds across 28 different issues are set to be gradually included in JP Morgan's emerging market bond indices starting from the next day, June 28.

India will constitute a 10% weight in these indices, which are utilized as benchmarks in global bond investments. This marks the first time Indian government bonds have been included in such major benchmarks, reflecting India's efforts to open its previously closed market, as explained by FT. India removed foreign ownership limits on some rupee-denominated bonds only in 2020.

Goldman Sachs estimates that prior to this inclusion, approximately $11 billion had already flowed into Indian government bonds. The intention to include Indian bonds was announced last year. Goldman Sachs projects that over the next 10 months, as Indian bonds are gradually added to the index, an additional $30 billion could flow in, potentially increasing foreign ownership from around 2% to about 5%.

Starting January next year, Indian government bonds are also scheduled to be included in Bloomberg's emerging market local currency government bond index, with other index inclusions under review within FTSE Russell.

India is expected to be one of the fastest-growing economies this year, with the UN forecasting a growth rate of 7% for the country in 2024.

 

 

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