InvestorQ : What is the significance if Indian bonds are included in global indices?
sara Kunju made post

What is the significance if Indian bonds are included in global indices?

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Mary Joseph answered.
3 months ago
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In a recent report prepared by Morgan Stanley, they have suggested that the Indian bond markets could finally be ripe enough to be included in global bond market indices. Morgan Stanley has suggested that by early 2022, the Indian government bonds could be included in the GBI-EM index of JP Morgan. This is one of the most prominent bond indices when it comes to allocation of capital by passive bond traders globally.

The general experience is that the inclusion of bonds in global indices would immediately attract passive bond investors. These passive bond investors invest in bond indices via exchange traded funds or ETFs. The inclusion of Indian bonds in the JP Morgan Bond index is likely to trigger $40 billion of bond inflows into India right away, which will boost the INR. In addition, this inflow is likely to scale up to $250 billion over the next 10 years.

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