JP Morgan Chase and Company to add Indian government bonds to market bond index

JP Morgan Chase and Company (JPM) has confirmed that it will add Indian government bonds to its benchmark emerging markets bond index starting from 28th June 2024. It is a significant move that will encourage more foreign investment in the domestic debt market. 

JPM said that 23 Indian Government Bonds (IGBs) with a combined notional value of 330 billion dollars are eligible for it. All fall under the category of 'fully accessible' for non-residents. India will have a maximum weight of 10% on the index. 

According to experts, the inclusion could bring in over 26 billion dollars of passive inflows into the country. On the equities side, India has been one of the top investment destinations among major emerging markets this year. 

The Indian government’s introduction of substantive



market reforms for aiding foreign portfolio investments is said to be one of the reasons behind JPM’s decision. Exclusion of Russia and troubles in China, is other factors considered by global debt investors to deepen bond market in India. Outside inflows in the Indian bond market have steadily risen up in the recent years.

 

So far in 2023, Foreign Portfolio Investors (FPI) have invested more than 28 thousand crore rupees in the country’s debt market compared to an outflow of nearly Nine thousand crore rupees in the same period of 2022. JP Morgan Chase and Company is a leading international banking and finance company with its operations spread over in more than 200 countries. As the largest of Big Four banks, the firm is considered systemically important by the Financial Stability Board.