Indian bonds to join Bloomberg’s EM debt indices from January 2025

Bloomberg to add Indian bonds: Bloomberg Index Services has announced its decision to include 34 Indian government bonds in its Emerging Market (EM) Local Currency Index, beginning January 31, 2025.

These bonds, eligible for investment through India’s fully accessible route (FAR), will be phased into the index over a 10-month period, with their weight increased incrementally by 10 per cent of their full market value each month until October 2025.

The country’s pursuit of inclusion in global indexes dates back to discussions initiated in 2013.

However, restrictions on foreign investments in domestic debt hindered progress until April 2020 when the Reserve Bank of India introduced securities exempt from such constraints under the FAR framework.

JPMorgan was the first to incorporate Indian bonds into its prominent emerging market debt index in September the previous year, paving the way forsubstantial capital inflows into India’s economy.

Bloomberg’s decision to include Indian bonds in its EM local currency indexes follows feedback received in January, with the phased inclusion set to commence in September 2024.

By January 31, 2024, 34 Indian FAR bonds valued at $448 billion were deemed eligible for inclusion in the EM Local Currency Government Index and other related indexes.

Upon full integration into the Bloomberg Emerging Market 10 per cent Country Capped Index, Indian FAR bonds will be capped at a 10 per cent weight within the index.