Inclusion in global bond index could witness inflows jumping tenfold
This event has been a long pending ask and expectation of the financial markets, which both the Indian central bank and the government had been actively pursuing and consistently putting forth the Indian point of view. Bond indices serve as crucial benchmarks for the fixed-income market and aid investors in assessing the performance of various debt instruments.
J.P. Morgan's bond indices enjoy widespread recognition among institutional investors, fund managers, and policymakers globally.
This inclusion signifies India's growing significance on the international financial stage and has direct implications in terms of a substantial influx of global funds into the world's fifth-largest economy.
Inclusion in such indices not only enhances a country's global visibility but also makes the country's debt market more appealing to foreign investors. It thrusts Indian bonds into the spotlight as a global investment opportunity and provides international investors with a straightforward and transparent means to gain exposure to the Indian debt market.
This heightened visibility holds particular significance for emerging economies like India, as it leads to an inflow of foreign capital which in turn stimulates economic growth.
However, this pivotal moment is not just about the immediate inflow of approximately $22 billion (10% of GBI-EM-DM fund). It could potentially attract further investments, including direct participation by foreign investors and inclusion in other global bond indices like Bloomberg and FTSE Russell, among others.
