India's inclusion in Bloomberg Bond Index likely to attract investment exceeding $5 bn

New Delhi (IANS) The decision to include Indian bonds in the Bloomberg Emerging Market Index, coming after the decision of JP Morgan to include India in the JP Morgan’s Emerging Market Bond Index, is a vote of confidence in the Indian economy, says V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

Inclusion of India in the Bloomberg Bond Index is expected to attract investment exceeding $5 billion. This comes on top of the expected investment of around $20 billion in the JP Morgan EM Bond Fund, he said.

He said that including India in the EM Bond Fund is a declaration that India’s financial market is mature and stable. This is also a vote of confidence in India’s macro financial stability, he added.

Deepak Jasani, Head of Retail Research, HDFC Securities, said Bloomberg has proposed to add Indian government bonds to its various indices starting from January 2025. Bloomberg said it will include India Fully Accessible Route bonds in the Bloomberg Emerging Market Local Currency Government Index and related indices in a phased manner over a 10-month period, starting January 31, 2025.

Indian FAR bonds will be included in the Bloomberg EM Local Currency Government indices with an initial weight of 10 per cent of their full market value on January 31, 2025. Within the market cap weighted version of the index, India is expected to be the third largest country after China and South Korea, he said.