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Informist, Tuesday, Jun. 9, 2026

 

--Source: Govt, RBI steps Fri for India bonds' inclusion in Bloomberg index 
--Govt source: India bonds in Bloomberg index to ensure capital inflows 
--Govt source: Not considering steps right now to curb capital outflows 
--Govt source: Remittances not affected adversely due to West Asia war 
--Govt source: Jan-Mar remittances trend seen continuing in Apr-Jun

 

NEW DELHI – The Reserve Bank of India and the government's co-ordinated steps Friday for foreign portfolio investors are aimed at securing the inclusion of India's bonds in Bloomberg's flagship Global Aggregate index, a top finance ministry official said Tuesday. In January, the index provider said it was reviewing India's inclusion in the $3-trillion index, with the next update expected by mid-2026.

 

The inclusion of India's bonds in the flagship index is expected to help solve the issue of deficient capital inflows in the Indian economy, the official said. With bond market participants expecting India's weight to be around 0.7% of the index, passive inflows alone are expected to top $20 billion once India gets Bloomberg's nod.

 

Most significantly, the government waived taxes levied on foreign investors' capital gains from government securities as well as the taxes paid on their interest income, commonly called withholding tax. The government also expanded the Fully Accessible Route of index-eligible securities by adding new issuances of 15-, 30-, and 40-year government bonds to the universe. It also removed all limits pertaining to investment into government bonds under the General Route except for the 6% overall cap on the holding of a certain bond. The RBI also announced other measures to attract foreign capital. 

 

India's bonds are currently included in the leading emerging market sovereign debt indices operated by Bloomberg Index Services, J.P. Morgan, and FTSE Russell. The government's actions are in sharp contrast to 2023 before the first index inclusion, when officials said they had taken no measures to spur the inclusion.

 

On the flip side, the government is not looking to take any steps to curb capital outflows, the official said. Prime Minister Narendra Modi has appealed to citizens to undertake austerity measures, including buying less gold, conserving fuel, and limiting foreign travel. India has limited gold imports under advance authorisation and hiked import duties on the precious metal but has no far not directly taken any measure to restrict capital outflows. Foreign investors have sold $26.91 billion of their financial assets in India so far in 2026, according to latest data from the National Securities Depository Ltd.

 

Helping the balance of payments will be the trend of strong remittances, the finance ministry official said. The trend in Jan-Mar is expected to continue in the June quarter with no adverse impact of the war in West Asia, the official said. Workers' remittances, a key contributor to India's foreign exchange earnings, rose to $43.5 billion in Jan-Mar from $33.9 billion a year ago, according to RBI data released Monday.

 

RBI Deputy Governor Poonam Gupta has also said over the past few months that she expects the secular trend of remittance growth to continue in the financial year 2026-27 (Apr-Mar). Some Indian migrants have been injured, killed, or are returning home from the region after the extended conflict between the US, Israel, and their allies and Iran, now in its fourth month.  End

 

US$1 = INR 95.35

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

 

Reported by Priyasmita Dutta

Written by Aaryan Khanna

Edited by Rajeev Pai

 

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