Bloomberg bond index inclusion could bring steady inflows into India’s debt market

India’s bond market could see a major boost as early as next week, with expectations building around a possible announcement on the inclusion of Indian government bonds in the Bloomberg Global Aggregate Index.

The process for this inclusion began in September 2025, when discussions were initiated, and feedback was sought from global investors. That feedback window closed on November 30, and market participants have since been expecting an announcement in the first half of January. If the decision goes through, it would mark another important milestone for India’s bond market.

The inclusion would apply to India’s Fully Accessible Route (FAR) government bonds. Notably, Indian government securities are already part of the Bloomberg EM Local Currency Government Index, and that earlier inclusion has already had a positive impact, including improved foreign investor participation and better market liquidity.

Feedback from foreign portfolio investors (FPIs) on the proposed inclusion has been largely positive. Investors have highlighted easier market access and greater operational comfort in India’s bond market. Another major attraction is India’s relatively higher bond yields compared with peers such as China, making Indian debt more appealing in a global environment where yields remain compressed in many markets.

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Currency dynamics also add to the appeal. With the rupee–dollar movement currently favourable, the overall return profile for foreign investors looks attractive, further strengthening the case for inclusion.

From a flow perspective, the impact could be meaningful over time. Market estimates suggest that a 1% weight in the Bloomberg Global Aggregate Index could translate into around $25 billion of foreign inflows. These inflows would not come immediately but are expected to be spread over 10 to 12 months following inclusion, providing steady support to the bond market.

India has already seen the benefits of global index inclusion. The country was added to the JPMorgan Emerging Market Bond Index about two and a half years ago, which led to sustained inflows and greater global visibility for Indian bonds.

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If Bloomberg inclusion goes ahead, it would further strengthen India’s position in global bond markets — another significant step in integrating India’s financial markets with the global system and a clear positive for long-term capital flows.

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