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Indian Not Included In JPMorgan’s Bonds Index, Remains On Radar For Inclusion: Report

Last Updated: October 05, 2022, 12:09 IST

India’s $1-trillion sovereign bond market is one of the biggest among emerging markets that is not part of any global index.

India is a large, deep and high-yielding market, will help to diversify as well as boost the average yield of the overall index

India remains on the radar for inclusion in JPMorgan’s influential emerging market local currency debt index after a review on Tuesday, dashing hopes that the economy will be added this year, according to a Reuters report.

After Russia’s exit from the GBI-EM (GBI-EM Global Diversified Bond Index) benchmark, some investors had hoped JPMorgan to include Indian bonds this year in the index. However, others cited investment hurdles “including a lengthy investor registration process and the operational readiness required for trading, settlement and custody of assets onshore”, said JPMorgan in a statement.

According to media reports earlier, India’s sovereign bonds could be added to the global index with an initial weightage of 10 per cent and the country’s $1-trillion sovereign bond market is one of the biggest among emerging markets that is not part of any global index.

Goldman Sachs Group has said that India is a large, deep and high-yielding market, will help to diversify as well as boost the average yield of the overall index.

The bond yield on January 1 had stood at 6.458 per cent and rose to hit 6.888 per cent by February 3. It then declined till February 18 when it touched 6.666 per cent. February-end also saw the start of the Russia-Ukraine war. Since then, the yield started witnessing a continuous upward trend till June 16 when it touch a high of 7.618 per cent. However, now, the yield on 10-year G-Secs has been seeing a downward trend since June 16.

The government started considering listing its debt in global indexes in 2019 and has been in discussions with JPMorgan and Bloomberg Fixed Income Indices, while also talking to Euroclear about clearing and settlement.

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