Bloomberg Index to Feature Government Bonds in India
On Monday, Bloomberg said that starting on January 31, 2025, Indian government bonds under fully accessible route (FAR) would be included in the Bloomberg Emerging Market (EM) Local Currency Government Index and associated indexes.
On January 31, 2025, Indian FAR bonds will be included to Bloomberg indexes, first weighted at 10% of their whole market value. In a statement, Bloomberg said that for the ten months ending in October 2025, “the weight of bonds will be increased in increments of 10% of their full market value every month, at which point they will be weighted at their full market value in the indices.”
Experts predict that the addition of Indian government bonds will bring in $2–3 billion in foreign capital to the Indian bond market. The news was made six months after JP Morgan said that Indian government bonds will now be included in the GBI-EM Global index. $25 billion might enter India as a consequence of the government bonds from India being included in the JP Morgan bond index.
India is poised to become the third market after China and South Korea to attain the 10% limit, once it is fully incorporated into the Bloomberg Emerging Market 10% Country Capped Index.
India is anticipated to rank third in terms of population under the market cap weighted version of the index, after South Korea and China. The index would include 34 Indian equities and, using data as of January 31, 2024, constitute 7.26% of a $6.18 trillion market value weighted index.
The Bloomberg EM Local Currency Government Index, the Bloomberg EM Local Currency Government Index 10% Country Capped Index, and its associated sub-indexes are among the indices that are eligible for inclusion.
The Bloomberg release said, “Bloomberg Indices will create an ex-India version of the EM Local Currency Government Index and can also create other standard and custom versions of the index.”
