The Strategist

Bloomberg: Banks are planning to include India in bond indices

09/12/2022 - 11:02

According to Bloomberg, major American banks plan to soon integrate the Indian bond market in world indices.

The agency claims that Morgan Stanley intends to announce India's inclusion in the JPMorgan Chase & Co. emerging market bond index in the middle of September. The real inclusion in this scenario will take place in the third quarter of 2023. A similar announcement is anticipated to be made in the fourth quarter of this year, with inclusion in the second or third quarter of 2023, according to Goldman Sachs Group.

The maximum weighting for a single country in the index is predicted to be 10% for India by both institutions. The amount of prospective investment flow is estimated at $30 billion.

JPMorgan’s official in India declined to comment.

Indian sovereign bonds have high yields, making it simpler for foreign investors to invest if they were included in global indices. According to the organization, India's debt market has a $1 trillion volume. The report notes that there have been multiple unsuccessful attempts to include India in indices in recent years for a variety of reasons. Bloomberg adds that the removal of Russia from these indexes following the conflict in Ukraine may aid the current progress.