FTSE Russell will join other major index providers JP Morgan and Bloomberg in including Indian bonds in its emerging market government bond index.
The indexing giant said Indian bonds will be included in the FTSE Emerging Markets Government Bond index from September 2025.
The country's bonds had been excluded from FTSE Russell indices over taxation, regulation and settlement concerns, noting its “inflexible length of the settlement cycle and the tax clearance process”.
However, FTSE said it has reclassified Indian bonds from zero to one on a Market Accessibility Level following “continued progress” made by the Reserve Bank of India.
“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 said in an announcement.
“FTSE Russell thanks the Reserve Bank of India for its continued dialogue and commitment to facilitating international investment in its local market.”
Both JP Morgan and Bloomberg have already added India to their respective indices.
JP Morgan added Indian government bonds with a combined value of $330bn to the JP Morgan GBI-EM Global Diversified index last September.
Bloomberg announced the inclusion of Indian foreign accessible route (FAR) bonds in the Bloomberg Emerging Market (EM) Local Currency Government index in March.
The $3.3bn iShares J.P. Morgan EM Local Govt Bond UCITS ETF (SEML) is currently the only ETF tracking the JP Morgan index, of which India accounts for roughly 4%.
