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India's Inclusion Into Key Govt Bond Index Pushed To Next Year: Report

Local bond settlement rules, tax complexities and the way in which investors will repatriate dollars are among the operational issues that still need to be resolved, the report stated citing a fund manager at a large global fund

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The government of India has likely pushed the inclusion of Indian government bonds on JPMorgan's emerging market global index to early next year, news agency Reuters reported on Tuesday.

The report stated that the government still needs to address various operation issues.

Local bond settlement rules, tax complexities and the way in which investors will repatriate dollars are among the operational issues that still need to be resolved, the report stated citing a fund manager at a large global fund.

The government and the Reserve Bank of India are expected to sort out some of these issues by the end of 2022, the report cited two sources aware of the development,

If resolved, an announcement on India's inclusion could come early next year, the sourced added.

Investors had expected the inclusion as early as this month as operators are meeting to review the composition of the index.

Russia's exit from the index, earlier this year, led foreign investors to step up purchases with no investment cap.

The government and the Reserve Bank of India are expected to sort out some of these issues by the end of 2022, said two of the sources.

If successful, India would be the last major emerging market to be added to the JP Morgan index. 

Its inclusion could result in additional flows of as much as USD 30 billion within 10 months into the Indian government bond market, Morgan Stanley estimated earlier this month.

India is opposed to providing any capital gains tax waivers to overseas debt investors and wants global bond index operators to consider the local settlement of its government securities if they are included in their indexes, according to two separate reports by news agency Reuters. 


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jpmorgan bond indexes Indian bonds