JPMorgan’s decision to include Indian govt bonds in its index shows confidence in economy: Finmin

The finance ministry on Friday hailed JPMorgan’s decision to include Indian government bonds in its widely-tracked emerging market debt index, saying the move reflects the growing confidence of the global financial markets in India's growth story and its government policies.

Economic affairs secretary Ajay Seth said: “It is a welcome development, showing confidence in the Indian economy."

Chief economic advisor V Anantha Nageswaran said: “It attests to the confidence that financial market participants and financial markets, in general, have on India’s potential and growth prospects and its macroeconomic and fiscal policies.”


“Just as long-term equity investors have been amply rewarded by investing in Indian markets, so will long-term investors in Indian government bonds be,” Nageswaran added.

The index provider will add the securities to the JPMorgan Government Bond Index-Emerging Markets from June 28, 2024, a move that could potentially attract inflows worth billions of dollars into the Indian debt market. The country will have a maximum weight of 10% on the index, JPMorgan said in a statement.

According to an estimate by HSBC Holdings Plc, the inclusion could draw potential flows of about $30 billion.

Given that India will continue to remain the world’s fastest-growing major economy in the next fiscal as well, it is expected to provide handsome returns to investors looking for an attractive market to park funds amid a global turmoil.

For India, the listing plan is aimed at not just financing a portion of the country’s elevated fiscal deficit in the aftermath of the Covid-19 outbreak but deepening its bond market.