Bloomberg to add India to EM bond indices from January 31, 2025

Bonds

Bloomberg Index Services (BISL) on March 5 said it will add India Fully Accessible Route (FAR) bonds in the Bloomberg Emerging Market (EM) Local Currency Index from January 31, 2025.

The inclusion of these bonds will be phased in over a 10-month period starting on the rebalance date of January 31, 2025, Bloomberg Fixed Income Indices document showed.

On January 8, BISL opened a consultation to get feedback on the proposed inclusion of the India FAR bonds in the Bloomberg Emerging Market (EM) Local Currency Index.

Based on the feedback obtained during the consultation, BISL has made the decision to include India FAR bonds in the Bloomberg EM Local Currency Government Index and all related indices (collectively, the “Indices”), document added.

The weight of India FAR bonds will be increased in increments of 10 percent of their full market value every month over the 10-month period ending in October 2025, at which point they will be weighted at their full market value (100 percent) in the indices.

"Bloomberg Indices is committed to serving the global investment community and this development will increase access to, and participation in, Indian markets,” said Nick Gendron, Global Head of Fixed Income Index Product, BISL.

As of January 31, 2024, there were 34 Indian FAR bonds (MV: $448bn) that would be eligible for the EM Local Currency Government Index, and the  other Indices, document said.

The local currency India bonds will be comprised of INR-denominated India government bonds which are placed through the Fully Accessible Route (FAR), must have a minimum amount outstanding of Rs 10 billion and follow the general rules of the Emerging Market Local Currency Index such as requiring bonds to have a minimum maturity of one year, BISL said.

BISL said, once completely phased into the Bloomberg Emerging Market 10 percent Country Capped Index, India FAR bonds will be fully capped at 10 percent weight within the index.

At that point, Indian Rupee is expected to become the third largest currency component, following the Chinese Renminbi and the South Korean Won, within the Bloomberg Emerging Market Local Currency Index, BISL added.

They further said using data as of January 31, 2024, the index would include 34 Indian securities and represent 7.26 percent of a US$6.18 trillion index.