India's Inclusion in JPMorgan Bond Index Boosts Rupee and Bonds

JPMorgan has announced that it will include India in its widely tracked emerging market debt index, leading to potential inflows of $20-30 billion into the country's economy. This move will help India finance its current account and fiscal deficits and raise its standing in international financial markets. The inclusion of Indian bonds in the index will start on June 28, 2024, and extend over 10 months. While this is positive news for India, it will trigger outflows elsewhere, with weightings for domestic government bonds issued by other countries set to shrink.