New Delhi [India], Indian government bonds will be included in the JP Morgan Government Bond Index, Emerging Markets (GBI-EM) starting June 28. Listing will take place over a period of 10 months starting June 28, 2024 until March 31, 2025.
India will have a 1 per cent weighting in JPMorgan's emerging markets (EM) bond index, gradually increasing to 10 per cent over a 10-month period, at an inclusion rate of approximately 1 per cent weighting monthly. The listing is estimated to bring between $20 billion and $25 billion of inflows to the Indian bond market. However, India's index-eligible bonds have already attracted $10 billion since inclusion was announced in September last year.
On September 21, 2023, global index provider JPMorgan announced that it would include Indian government bonds in its emerging market indices.
Only Indian government bonds issued by the Reserve Bank of India (RBI) under the Fully Accessible Route (FAR) will be included in the indices. All FAR-designated IGBs maturing after December 31, 2026 will be eligible for inclusion in JPMorgan's emerging markets (EM) bond index.
In the post-policy press conference on June 7, RBI Governor Shaktikanta Das said the central bank is not worried about large inflows of foreign funds arising from the inclusion of global bonds.
"The RBI has a number of instruments to manage the flows. We have managed it in the past and we will do it in the future too. There is no need to worry about it," Das said.
Experts believe that strong flows related to inclusion in the index are likely to boost demand for Indian government securities in the current fiscal year, once short-term liquidity problems in certain papers are resolved. Vishal Gupta, co-founder of IndiaBonds.com, says the inclusion of Indian government bonds in the JP Morgan index is a watershed moment for Indian fixed income markets.
"This necessarily puts Indian bond markets on the radar of global bond investors and while initial investments are assumed to be between $25 billion and $30 billion, inclusion in the index paves the way for this figure to rise. continue to grow in the coming years. said vishal gupta
Gupta further added that it is important to grow the investor base for any market, and inclusion in the index helps expand the number of players, which further benefits everyone in the form of additional liquidity in the market.
"Global investors have been looking to allocate capital to emerging markets given their reluctance to invest in other large countries such as Russia or China in recent years. Therefore, the timing of inclusion of this index is also almost perfect.
I think investments will initially start through government bonds, but will trickle down to AAA to lower credit ratings as well in the coming years.”
India will have a 1 per cent weighting in JPMorgan's emerging markets (EM) bond index, gradually increasing to 10 per cent over a 10-month period, at an inclusion rate of approximately 1 per cent weighting monthly. The listing is estimated to bring between $20 billion and $25 billion of inflows to the Indian bond market. However, India's index-eligible bonds have already attracted $10 billion since inclusion was announced in September last year.
On September 21, 2023, global index provider JPMorgan announced that it would include Indian government bonds in its emerging market indices.
Only Indian government bonds issued by the Reserve Bank of India (RBI) under the Fully Accessible Route (FAR) will be included in the indices. All FAR-designated IGBs maturing after December 31, 2026 will be eligible for inclusion in JPMorgan's emerging markets (EM) bond index.
In the post-policy press conference on June 7, RBI Governor Shaktikanta Das said the central bank is not worried about large inflows of foreign funds arising from the inclusion of global bonds.
"The RBI has a number of instruments to manage the flows. We have managed it in the past and we will do it in the future too. There is no need to worry about it," Das said.
Experts believe that strong flows related to inclusion in the index are likely to boost demand for Indian government securities in the current fiscal year, once short-term liquidity problems in certain papers are resolved. Vishal Gupta, co-founder of IndiaBonds.com, says the inclusion of Indian government bonds in the JP Morgan index is a watershed moment for Indian fixed income markets.
"This necessarily puts Indian bond markets on the radar of global bond investors and while initial investments are assumed to be between $25 billion and $30 billion, inclusion in the index paves the way for this figure to rise. continue to grow in the coming years. said vishal gupta
Gupta further added that it is important to grow the investor base for any market, and inclusion in the index helps expand the number of players, which further benefits everyone in the form of additional liquidity in the market.
"Global investors have been looking to allocate capital to emerging markets given their reluctance to invest in other large countries such as Russia or China in recent years. Therefore, the timing of inclusion of this index is also almost perfect.
I think investments will initially start through government bonds, but will trickle down to AAA to lower credit ratings as well in the coming years.”
