Bloomberg global index entry in sight for Indian G-Secs

Mumbai: Bloomberg's index committee is expected to meet mid-July to review whether Indian government bonds should be included in its Global Aggregate Index, with market participants anticipating a positive decision from the panel.

Tax exemptions on interest income and capital gains have been a key factor in Bloomberg's consideration of including Indian bonds in its index and expectations of Indian debt's inclusion in the gauge have driven the recent rally in the bond market.

"The index committee is expected to meet in mid-July, and unlike the last index review, they are not conducting a public market consultation beforehand. But I think an approval is a very likely outcome this time," a senior executive at a foreign bank told ET.


A Bloomberg spokesperson, replying to an email query by ET, said that it continues to "evaluate the Indian government bond market for potential inclusion in the Bloomberg Global Aggregate Index, including recent policy reforms and market developments. As stated in our public announcement from January, we plan to provide an update by mid-year 2026."

The Bloomberg Global Aggregate Index is one of the world's most widely tracked investment-grade bond benchmarks. It tracks over $70 trillion worth of bonds, making it a benchmark for many of the world's largest asset managers.

To be sure, if a decision on including the bonds in the global index is deferred yet again, sovereign bond yields could harden by 10-12 basis points, traders said. The 10-year bond yield has softened 26 basis points in June and closed at 6.74% on Wednesday.

One basis point is a hundredth of a percentage point.

An Indian Summer
Foreign portfolio investors (FPI) have poured in a record high of ₹55,518 crores in June in Indian government bonds, with part of the inflows driven by expectations that an announcement on the country's inclusion in the Bloomberg bond index is imminent.

A further rally in bonds is expected once fund managers have certainty on the monsoons.

"A further rally can happen after there is certainty on Monsoon, however Bloomberg inclusion is getting factored in so if that gets postponed, we reverse 10 basis points of this rally," said Alok Singh, head of treasury at CSB Bank.

Goldman Sachs in its recent report has also recommended investors to go long on India's long-tenured securities. The report said inclusion in the global aggregate index is "a question of timing rather than direction, and a mid-year announcement likely." They expect $15 billion passive inflows in the phase-in period after the announcement.

Along with tax exemptions, the Reserve Bank of India also added 15, 20 and 30 year bonds in the FPI eligible fully accessible route (FAR) securities, widening the investment universe of these bonds.

Bloomberg Indices in January deferred the decision on India's inclusion in the Global Aggregate Index until mid-2026, citing the need for further review of operational and market infrastructure issues.

Indian bonds are already part of three major emerging-market debt indexes - the JP Morgan EM index included in June 2024, Bloomberg EM index included in January 2025 and the FTSE Russel EM index included in September 2025.