The report said that index providers are “increasingly tilted” to include India to fill the gap expected due to Russia’s exclusion.
Moreover, the Reserve Bank of India (RBI) has been taking feedback from foreign banks to better handle increased custodian flows from foreign investors. Currently, JP Morgan assigns a maximum of 10 per cent weightage to a country.
According to Goldman Sachs, India’s entry could lead to Mumbai’s debt market seeing inflows as high as $30 billion over time.
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Reuters, earlier on Thursday, reported that a review from JP Morgan kept investors active.
While traders expect Indian bonds to remain an attractive bet for foreign investors, they “may not go heavily long unless there is any fresh trigger like material progress on the index inclusion front,” Ashutosh Tikekar, head of global markets – India at BNP Paribas was quoted as saying by the news agency.
Foreign investors bought bonds worth Rs 4,530 crore ($545.5 million) on a net basis in August under the “Fully Accessible Route” (FAR), the biggest such purchase since May.
First Published: Sep 14 2023 | 2:07 PM IST