by Churchil Bhatt, Executive Vice President & Debt Fund Manager, Kotak Mahindra Life Insurance Company Limited

“After spending almost two years in watch list, India got included in JP Morgan’s flagship Government Bond Index – Emerging Market (GBI EM). This phased inclusion will begin from June 2024 onwards and will be completed in March 2025, where India would account for 10% of the index weight. This move is expected to garner approximately US$25 billion of inflows into Indian Government Bond markets. In the longer run, this could trigger inclusion from other similar indexes, such as Bloomberg Global Aggregate index which may bring about further flows into the market. The announcement to include India’s bonds in the GBI-EM index will support both India bonds and local currency. We expect 10-year Government bond yields to settle comfortably below 7% as we inch closer to the Index inclusion date.”