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India’s Bond market has $30 bn riding on index inclusion
January 21, 2022
India is inching toward a major milestone opening its $1 trillion government bond market to more worldwide investors, perhaps the most ambitious attempts to attract in foreign inflows since the nation librelized its economy three decades ago.
Policy makers have gone through months getting ready to join worldwide indexes, key benchmarks that increasingly decide how large asset managers allocate their capital. What’s more now, after a series of fits and starts, analysts expects the world’s last big emerging market to finally get nod this year or mid 2023 by providers like JPMorgan Chase and Co. and FTSE Russell.
Entry into major indexes is a step change for India, which has since a long time ago lingered behind peers like Brazil and South Africa in tapping global financial markets. Foreign investors hold just around 2% of generally outstanding government securities and the country’s central bank has historically been averse to large debt inflows.
But inclusion may finally make India a hot ticket for capital. In the a long time since China was added to worldwide indexes, foreign ownership for country’s government bonds rose to practically 11%, up from 7.6%, leading to a boost in confidence in its fixed-income market and internationalization of the yuan.
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