Key Points
In a development that could help India attract $21 billion (Rs 1.7 lakh crore) worth of investments from the next fiscal, global financial firm JP Morgan has said it plans to include Indian government bonds (IGBs) or government securities (G-Secs) into its benchmark Emerging Market index...
The inclusion of the IGBs will be staggered over a 10-month period from June 28, 2024 to March 31, 2025, indicating 1% increment on its index weightThis would help attract higher foreign flows, as many overseas funds are mandated to track global indicesIt will also help bring in large passive investments from overseas, as a result of which more domestic capital would be available for industry..
The access to lower interest-bearing foreign money will also reduce the borrowing cost for the government..
JP Morgan global bond indices account for $213 billion worth of investments by global investors, said Edelweiss Mutual Fund..
A 10% weight for IGB would translate into $21 billion worth of investments in IGB by March 31, 2025 assuming investors have zero weight as of now and would like to be index neutral...
You might be interested in
FPIs get licence to thrill, lap up $8.7 billion govt bonds in 5 months
01, Mar, 24Foreign portfolio investors (FPIs) have purchased ₹71,817 crore - or around $8.7 billion - worth of Indian government bonds since September 22, the day JP Morgan announced the index inclusion, latest data by Clearing Corporation of India Limited (CCIL) showed. To be sure, for the whole of 2023, overall FPI investment in Indian debt - including corporate bonds - was $8.3 billion.
Foreigners flocking to Indian bonds make a splash across markets
01, Apr, 24India Business News: Since India's significant inclusion in key global bond indexes, as announced by JPMorgan Chase & Co in September, the country has seen a remarkable in
StanChart sees Indian government's net borrowing unchanged in FY25
17, Jan, 24India's net government borrowing in the next fiscal is likely to remain largely unchanged. The central government is expected to target a narrower fiscal deficit of 5.3%-5.6% of GDP in FY25, leading to a net borrowing of 11.80 trillion to 12.20 trillion rupees. Foreign investors are expected to invest $25 billion-$30 billion in government debt, with a significant portion being absorbed by foreign portfolio investment. This increase in foreign portfolio investment is driven by the inclusion of government bonds in the JPMorgan emerging market debt index starting June 2024.
FPI buying in index eligible government bonds picks up pace
17, Oct, 23Foreign portfolio investment in Indian government securities designated under the Fully Accessible Route (FAR) have crossed the ₹1 trillion lakh crore, rising to ₹1.02 lakh crore as on October 16 versus ₹96,661.33 crore as on September 29, Clearing Corporation of India data showed.
Indian government bonds likely to be part of Bloomberg emerging market index from September 2024
08, Jan, 24The development which can infuse $2 billion to $3 billion in India's sovereign debt market comes as Indian government bonds are set to become part of JP Morgan's Government Bond Index-Emerging Markets (GBI-EM) global index suite from June 2024
Indian govt has 54 Chinese investment proposals pending: Nirmala Sitharaman
27, Mar, 23India Business News: The Indian government is not considering easing restrictions put in place a few years ago on foreign investments from countries that share land border
Indian G-secs in Bloomberg EM Index from 2025
06, Mar, 24On Tuesday, Bloomberg said that Indian FAR (Fully Accessible Route) bonds would be included in the Bloomberg EM Local Currency Government indices with an initial weight of 10% of their full market value on January 31, 2025.
India’s inclusion in JPMorgan bond index could bring $23-bn inflows, says FM Sitharaman
05, Oct, 23In September, JPMorgan Chase & Co. said it will add Indian government bonds will be incorporated into the Government Bond Index-Emerging Markets (GBI-EM) index and its index suite.
Cheaper borrowing, forex benefit — how JP Morgan’s bond move will benefit Indian govt & companies
27, Sep, 23JP Morgan included Indian bonds in its widely-tracked emerging markets bond index, exposing them to foreign investors. Finance Ministry officials and market analysts both lauded move.
Bloomberg index inclusion to add $3-4 billion inflows
05, Mar, 24As of 31 January, 34 Indian FAR bonds of $448 billion are eligible for the Bloomberg indices