Bloomberg Index Services on Monday proposed including eligible Indian bonds in its emerging market local currency index from September, a move that could lead to billions of dollars of inflows into the country.
The proposal comes just a few months after JPMorgan said it would include India in its widely tracked emerging market debt index from June.
The Indian government began discussing the inclusion of its securities in global indexes as far back as 2013 but restrictions on foreign investment in domestic debt hampered the process.
In April 2020, the Reserve Bank of India introduced securities that were exempt from foreign investment restrictions under a "fully accessible route" (FAR).
"Under the proposal, inclusion of India FAR bonds in the Bloomberg EM Local Currency Indices is to be phased in over a five-month period starting in September 2024," the index provider said in a statement
Gaura Sengupta, India economist at IDFC First Bank, said India's inclusion in the index would result in inflows of $2 billion to $3 billion over a five-month period.
India will continue to be excluded from the Bloomberg Global Aggregate and related indices, the statement said.
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
BJP's Hindi heartland dominance faces test in phase 3 polls
May 2, 2024 9:14 PM
Lok Sabha Election: Re-elections at a Ajmer booth after presiding officer misplaces register of voters
May 2, 2024 4:54 PM