Foreign institutional investors (FII) inflow into debt turned positive in August for the first time in seven months. FIIs bought $624-million worth of domestic bonds in August after sustained selling since January. The inclusion of Indian sovereign bonds in global bond indices could further boost inflows, experts said.
Morgan Stanley has projected that the inclusion of India in global bond indices will attract $170-250 billion in bond inflows in the next decade in its base/bull scenario. The global financial services firm expects India to be included in global bond indices in early 2022.
According to a Financial Times report, Wall Street bank JPMorgan is sounding out big investors on adding India to its widely tracked emerging-market bond index, setting the stage for tens of billions of dollars of inflows as the country’s domestic market opens up to foreign capital.