India is anticipated to see global inflows worth $25-$30 billion with its bond market getting included in JPMorgan Chase & Co’s emerging markets bond index from Friday, June 28.
The South Asian country becomes the 25th market to be included in the index since its launch in June 2005.
The inclusion follows an announcement on this made last September, paving the way for substantial inflows of foreign capital into the Indian economy.
Since the announcement, India’s index-eligible bonds have already attracted $10 billion.
Indian Government Bonds (IGBs) will be included into the widely followed JPMorgan Government Bond Index-Emerging Markets (GBI-EM) starting with a one percent weight, which will gradually increase to 10 percent over the next 10 months.
According to JPMorgan, the average maturity of the Indian bonds included is seven years, with a yield-to-maturity (YTM) of 7.09 percent.
The bonds with the highest weightage in the index (over 0.5 percent) include 7.18 GS 2033, 7.30 GS 2053, and 7.18 GS 2037.
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