Emerging-markets Bond Index: JPMorgan Chase & Co. will start including Indian government bonds in its benchmark emerging-market index on June 28 in 2024, which is a significant milestone that could attract foreign capital to India’s debt market. The addition of the index comes after the Indian government announced its “FAR programme in 2020 and substantive market reforms for aiding foreign portfolio investments,” according to a statement released on Thursday by the American multinational investment bank JP Morgan.
Given that India’s economy is still among the fastest-growing major nations, its inclusion in the JPMorgan Government Bond Index-Emerging Markets index may be considered as yet another indication of its growing appeal to international investors. This move is important, especially in light of the fact that some global industrial behemoths are considering setting up business in India as part of their China+1 diversification plan in a post-pandemic future.
JPMorgan to add India to its Emerging-markets Bond Index
India is anticipated to have a maximum weight of 10% in JP Morgan’s Government Bond Index-Emerging Markets, the bank said on Thursday. According to JP Morgan, “Inclusion of the IGBs will be staggered over a 10-month period beginning June 28, 2024, through March 31, 2025 (i.e., inclusion of 1% weight per month)”.
There are now 23 Indian government bonds that are index-eligible, with a total notional value of USD 330 billion. Already, foreign investors are rushing to invest in India’s equities markets. Foreign portfolio investors continued to be net purchasers in the Indian equity markets from March through August. However, the amount of inflowing funds had slowed and remained on the negative side in September.
Foreign investors have contributed a total of Rs 126,998 crore to the Indian stock markets so far in 2023. The positive economic future for India, as predicted by numerous international agencies, seems to have rekindled interest in domestic stocks.