Economic Survey 2025 | FPIs invested Rs 62,431 crore in Indian bonds till November after JP Morgan index inclusion

Bonds

Foreign portfolio investors (FPI) invested Rs 62,431 crore in government bonds till November after their inclusion in the JP Morgan index, the Economic Survey 2025, which released on January 31, said.

Since the announcement of inclusion of Indian Government Bonds (IGB) in JP Morgan index in October 2023, there has been heightened activity in the FPI debt segment with cumulative flows of Rs 1.1 lakh crore from October 2023 to June 2024, the 2024-25 survey said.

On June 28, JP Morgan included 29 government securities under Fully Accessible Route (FAR) in its emerging market index. India carries a 1 percent weight in the index, with planned incremental increases each month until March 2025.

FAR enables non-residents to invest in specified government of India securities without any investment ceilings.

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On September 22, 2023, JPMorgan Chase & Co announced it would add the Indian government bonds to its JPMorgan Government Bond Index-Emerging Markets.

Assets under custody, which reflects the total market value of the holdings, shows that FPIs' cumulative investment in FAR securities crossed the $20-billion mark within nine months of the announcement of their inclusion in the JP Morgan EM Bond Index.

In FY25, the inclusion resulted in a net inflow of more than $3 billion in Indian FAR bonds, with assets under custody standing at $28 billion as of December 15, 2024. Survey document showed.

On December 31, Moneycontrol reported that investment by the FPI in the government securities in the JP Morgan Bond index doubled in 2024 on back of better returns compared to advanced economies, robust economic fundamentals, and least volatile rupee among Asian peers.