GOVT BONDS TO DRAW MORE GLOBAL FUNDS, CUT BORROWING COST

IT took over a decade of efforts for Indian government bonds to get included in a global bond index. The discussions began in 2013, and over the next 10 years the government removed one hurdle after another to finally convince JP Morgan, the largest bank in the US, to include Indian government bonds (G-secs) in its emerging market bond index.

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They will be included in June 2024, and over the next 10 months, the weightage of G-secs in the index would reach 10 percent. The inclusion is another step towards globalisation of the Indian financial market. While this is largely a positive development for India-ensuring stable foreign fund inflows, lower bond yields and a stronger rupee it also means a closer scrutiny of government finances by global investors.