India is seeking inclusion in JPMorgan global bond indexes

By Kartik Goyal and Siddhartha Singh

India’s government is working with JPMorgan Chase & Co. to potentially include its bonds in the firm’s global indexes, according to people with knowledge of the matter.

India is aiming for a 7 per cent weighting in indexes tracked by global investors, one of the people said, without elaborating and asking not to be identified citing rules. Details haven’t yet been finalized and may change.

Inclusion in global indexes could attract billions of dollars into Indian debt, at a time when public finances are deteriorating. India’s economy is set to contract this year for the first time in decades as the coronavirus pandemic hits demand. Moody’s Investors Service downgraded the nation’s ratings this month to the lowest investment-grade level.

India’s government in March opened up a wide swath of its sovereign bond market to overseas investors, taking its biggest step yet to secure access to global indexes. That plan has so far attracted 182.6 billion rupees ($2.4 billion) of inflows.

A 2013 attempt at inclusion into JPMorgan indexes had fizzled out when Indian officials resisted the removal of the cap on foreign ownership. Representatives for JPMorgan didn’t immediately reply to two phone calls and a text message seeking comment. An Indian Finance Ministry spokesman couldn’t immediately be reached for comment.

The idea of tapping the global debt market more aggressively was floated in September when Indian Prime Minister Narendra Modi was in New York. Bloomberg LP, the parent company of Bloomberg News and Bloomberg Barclays Indices, announced it would help Indian authorities navigate a course to inclusion in international bond benchmarks.

[Source – Economic Times]


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