MC EXCLUSIVE FPIs give positive response for Indian bonds inclusion in Bloomberg Global Index: Sources

FPIs give positive response for Indian bonds inclusion in Bloomberg Global Aggregate Index

Foreign portfolio investors (FPIs), the ones that are part of Bloomberg Index Services Ltd (BISL) have reportedly given an encouraging response to the index provider's queries, paving the way for the proposed inclusion of Indian government securities in the Bloomberg Global Aggregate Index, people familiar with the discussions told Moneycontrol.

According to sources, the optimism among global investors stems largely from India’s relatively higher yield-to-maturity (YTM) on bonds compared to several emerging-market peers.

The attractive yield differential has strengthened the case for adding Indian bonds under the Fully Accessible Route (FAR) to the widely tracked index.

Bloomberg Index Services (BISL) is a part of Bloomberg LP and a global provider of fixed income, commodity, and equity benchmark, in September had sought investor feedback on whether FAR-eligible Indian government bonds should be added to the Bloomberg Global Aggregate Index. The feedback window remains open until November 30, 2025.

It is gathered that several major FPIs have already submitted their responses ahead of the deadline, signalling strong support in favour of India’s potential inclusion.

This inclusion will bring huge amount of flows to the Indian debt market through bonds, easing the pressure on the Indian rupee and reducing yields on the bonds.

Currently, the investment by the FPIs in the FAR securities stood at Rs 3.21 lakh crore.

Sources added that the announcement for the inclusion of Indian bonds in Bloomberg index, is likely to made by Bloomberg in January.

Bloomberg spokesperson declined to comment on Moneycontrol's query.

While final decisions will rest with Bloomberg Index Services after the consultation period closes, the positive sentiment from large foreign investors marks a significant step toward India’s increasing integration with global fixed-income markets.

BISL will decide unilaterally whether, and how, to respond to any feedback, comment, or recommendation that results from the review process and makes no guarantee nor is under any obligation to comply with responses, Bloomberg said in September.
The index provider had included India in its emerging market local currency bond index in January 2025.

India has 41 securities under the FAR for which there are no foreign investment limits. If all 41 were to enter the Global Aggregate as of August 2025, the FAR bonds would represent $502 billion in market value, or 0.7 percent in weight, making Rupee the 9th largest currency by market value out of the 26 currencies in the Global Aggregate Index, Bloomberg said in a communication to its investors in September, 2025.

India's FAR bonds, or Fully Accessible Route bonds, are Indian government securities - introduced by the central bank in 2020 - that allow non-resident investors unrestricted access and investment without any caps.

The FAR bonds were introduced to boost foreign participation in India's bond market, enabling foreign entities to invest without facing previously applicable investment limits. These bonds have also been included in major global indices like the JPMorgan GBI-EM Index, enhancing the profile of Indian debt.