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The move comes barely two weeks after JP Morgan included India in its Global Government Bond Index-Emerging Markets (GBI-EM) global index suite starting June 2024.
The inclusion in the index is likely to facilitate $24 billion of inflows between June 2024 and March 2025, with India expected to account for a maximum weight of 10% of the index
The inclusion could serve to lower funding costs slightly, and support further development of domestic capital markets, Fitch said.However, the direct positive effects on Indias credit profile will likely be marginal in the near term, according to the ratings agency.
JP Morgan is set to add Indian government bonds to its widely-tracked emerging markets debt index from June 2024.
This development is also likely to stabilize the Indian rupee, reduce interest rates, lower bond yields, and subsequently reduce the cost of borrowing