FTSE Russell has added India to the FTSE Emerging Markets Government Bond Index (EMGBI), with inclusion starting in September 2025.
FTSE Russell announced that the Market Accessibility Level for India will be reclassified from 0 to 1. “This decision reflects the continued progress in the accessibility of the market for these securities for international investors and the growing importance of the Indian government bond market in mainstream global emerging markets bond portfolios. FTSE Russell thanks the Reserve Bank of India for its continued dialogue and commitment to facilitating international investment in its local market,” FTSE Russell said in a press release.
On Tuesday, Government Securities (G-Secs) yields softened on expectation of their inclusion in FTSE Russell’s Emerging Market Bond Index and possibility of the RBI’s rate setting panel voting for a change in the monetary policy stance.
India’s inclusion in global bond indices will help in supplementing the BoP (balance of payments) surplus while ensuring incremental ‘Indianisation’ of global hot money.
Following the last September announcement of the inclusion of Indian Government Bonds (IGBs) in JPMorgan Chase’s benchmark Emerging Markets Bond Index Global Diversified (GBI-EM GD) index starting June 28, 2024, monthly net inflows into FAR (fully accessible route) securities have gone up. Global funds have poured close to $18 billion into the Indian government debt since the September 2023 index inclusion.
Once the Bloomberg Barclays EM bond index incorporates Indian bonds into its Bloomberg EM Local Currency Government indices, starting January 2025, the funds flow numbers will further inch up.
In March, FTSE Russell had deferred the inclusion of India in its Emerging Markets Government Bond Index (EMGBI), noting that the country would stay in its watchlist as certain criteria for inclusion were still not met.