JPMorgan Chase & Co. will add Indian government bonds to its benchmark emerging-market index, a keenly awaited event that could drive billions of foreign inflows to the nation’s debt market. – Bloomberg.

This decision is the newest sign of the growing appeal of India to international investors as the economic growth of the country outstrips its peers, its geopolitical influence increases, and brands, including Apple Inc., are looking for alternatives to China.

While foreigners have a very small role to play in the bond market of India, the inflows have been on the increase in recent years, and the assets of the country have proved to be resilient to any financial disturbance that has entirely roiled other developing countries.

The index provider will be adding Indian securities to the JP Morgan Government Bond Index-Emerging Markets that start on the 28th of June, 2024. The South Asian country will have the maximum volume of 10% in the index as per a statement on Thursday.

“The move follows the Indian government’s introduction of bonds that can be fully owned by foreigners in 2020, as well as steps to aid foreign portfolio investments, the team led by the firm’s global head of index research, Gloria Kim, said in a statement. Almost three-quarters of benchmark investors surveyed were in favor of India’s addition to the index,”

they added.

“Foreign investors will have access to a large, idiosyncratic factors driven market, while domestic investors will welcome investors with varying risk-return preferences,”

Nagraj Kulkarni, the co-head of Asia rates ex-China at the Standard Chartered Plc in Singapore, had said. He is expecting the decision to drive the inflows, which count to $25 billion, within March 2025.

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