More Stories

Informist, Thursday, Sept. 18, 2025

 

NEW DELHI – Bloomberg Index Services Ltd. Thursday sought feedback from investors on whether to include India's fully accessible route bonds in its Global Aggregate Index, it said in a consultation note. This is the index provider's flagship index for global investment grade debt.

 

India has been part of Bloomberg's Emerging Market Local Currency Indices since January, with its inclusion being phased in over the course of ten months until November. India's fully accessible route bonds, which have no limits on foreign investment, have also been added to flagship emerging market local currency indices operated by JP Morgan and FTSE Russell. As of Aug. 29, 41 Indian gilts are in Bloomberg's emerging market indices.

 

"If all 41 were to enter the Global Aggregate as of August 2025, the FAR bonds would represent USD 502 billion in market value, 0.7% in weight, and be the 9th largest currency by market value of the 26 currencies, in the Global Aggregate Index," the note said.

 

The yield to maturity of rupee-denominated bonds being considered for inclusion is 6.63%, far higher than any of the top 10 currencies currently represented on the index, according to the note. Considering the nearly $3 trillion in assets under management tracking Bloomberg's Global Aggregate Index, the potential passive inflows into India's debt could total over $20 billion. Currently, foreign portfolio investors hold around 3% of India's outstanding central government bonds, of which INR 3.01 trillion is invested in fully accessible route bonds.

 

Bloomberg sought feedback on the improvement in the accessibility of investors into India's government bond market, and what challenges still remain for India's fully accessible route bonds to be included in the Global Aggregate. It offered investors three choices between what best represented their view on India's bonds, and sought details for their comments. The first was if investors were comfortable with India's accessibility and if India's bonds should be included on the Global Aggregate index with a sufficient lead time for preparation. The second option was that India should eventually be included, but there were concerns about investibility and scale, while the third option was that India was not ready for inclusion and more time was needed.

 

Accessibility had been a key challenge to India's inclusion on global bond indices for over a decade. The listing got a fillip when the Reserve Bank of India introduced fully accessible route bonds in 2020, which eventually led to JP Morgan becoming the first index provider to announce India's inclusion on a global bond index in September 2023. More recently, capital markets regulator the Securities and Exchange Board of India eased compliance and documentation for foreign portfolio investors investing solely in Indian government bonds.

 

Foreign portfolio investors have turned positive on India's government bonds since August, picking up gilts as their spreads over US Treasury yields have widened. S&P Global Ratings had also upgraded India's sovereign credit rating by a notch to 'BBB' in mid-August. Since then, FPI investment into India's fully accessible route bonds has increased by INR 139 billion, or over $1.5 billion, according to Clearing Corp. of India data.  End

 

US$1 = INR 88.13

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Aaryan Khanna

Edited by Deepshikha Bhardwaj

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2025. All rights reserved.