“Following client feedback received during the Bloomberg 2023 Fixed Income Index Advisory Councils, Bloomberg Index Services is launching a consultation to solicit feedback on the proposed inclusion of the India fully accessible route bonds in Bloomberg Emerging Market (EM) Local Currency Index,” a document accessed by ET read.
The move by the Bloomberg index comes four months after JP Morgan included Indian bonds in its emerging markets index starting June 2024. Inclusion of Indian bonds in JP Morgan’s index is estimated to bring in inflows in the range of $20-$25 billion, treasury executives said.
Bank treasury executives following the developments said that the assets under management tracking the Bloomberg Emerging Market Local Currency Index were in the region of $20-$40 billion in total and that if India were to be included, the country’s bond market would receive around $2-$4 billion as a proportion of flows.
The gush of foreign inflows is seen pushing down Indian government bond yields – and therefore corporate borrowing costs – as well as providing a cushion to the rupee in a volatile global environment. Under the proposal put forward by the Bloomberg EM currency index, the inclusion of Indian fully accessible government securities would be phased in over a 5-month period starting September 2024.