FTSE Russell to Include Indian Sovereign Bonds in EMGBI

(Reuters) – Global index provider FTSE Russell announced on Tuesday that it will include India’s sovereign bonds in its Emerging Markets Government Bond Index (EMGBI) starting September 2025. This follows similar decisions by JP Morgan and Bloomberg Index Services, potentially attracting billions of dollars to local bonds.

The London-based index provider also announced the addition of South Korean government bonds to the FTSE World Government Bond Index (WGBI) after being on the watch list for two years. South Korean government bonds will represent 2.22% of the WGBI, effective November 2025.

FTSE indicated that Indian securities will account for 9.35% of the EMGBI, after being on the watch list for three years. The market value of the EMGBI is $4.7 trillion.

Madhavi Arora, chief economist at Emkay Global Financial Services, remarked that the decision is sentiment-positive and should structurally strengthen demand for Indian bonds. Since the announcement of inclusion into the JPMorgan Emerging Market index in September 2023, Indian bonds have seen nearly $18.5 billion in foreign inflows.

In March, FTSE had delayed Indian bonds' inclusion due to issues related to taxation, registration, and settlement but recognized improvements in the accessibility of these securities.

The announcement also coincides with the inclusion of Indian government securities in the JPMorgan Government Bond Index-Emerging Markets starting June 2024 and Bloomberg Index Services’ Emerging Market Local Currency index from January 2025.