Key Points
The inclusion could serve to lower funding costs slightly, and support further development of domestic capital markets, Fitch said.However, the direct positive effects on Indias credit profile will likely be marginal in the near term, according to the ratings agency.ETMarkets.com..
Fitch Ratings on Wednesday said the inclusion of Indian sovereign bonds in JP Morgan's key emerging-market bond indexes will support a diversification of the investor base, but the positive effect on the country's credit profile will likely be marginal, at least in the near term...
A few days ago, global financial firm JP Morgan said it plans to include Indian government securities (G-Secs) into its benchmark emerging market index from June 2024...
Indias high government debt and interest/revenue ratios are weaknesses in its credit profile, Fitch said, adding that the developments that help lower funding costs can have a significant influence on the sovereigns creditworthiness...
"However, we expect the positive effect on the sovereign rating of Indias inclusion in the JP Morgan Global Bond Index-Emerging Markets (GBI-EM) to be small, especially in the near term, as its impact on fiscal credit metrics is unlikely to be significant," it added...
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