India requires strong credit rating to join $ 29.5 TN global bond index: FTSE Russell Top Officer | Stock market news

Mumbai: India will require a strong credit rating to include India in the Ftse World Government Bond Index, which is said by two senior officials, with a market price of $ 29.5 trillion with a 25-country benchmark.

There are 18 separate criteria that need to be completed to get admission in the World Government Bond Index, “the most difficult benchmark to achieve access to any asset class”, Fiona Baiceet, Chief Executive Officer; And Scott Harman said in an interview by Scott Harman, head of fixed income, currencies and goods at FTSE Russell.

India is currently rated in the lowest investment grade by global rating agencies, some unhappy about the government.

“Usually, we will work with policy makers so that they can help understand the framework,” Baset said. “Clearly, desire for inclusion and therefore a lot of work of our work is around to educate and all our indices are transparent.”

In September, the Government of India bonds will be included in the FTSE Emerging Markets Government Bond Index (EMGBI), which was the market price of $ 4.7 trillion on 31 January. However, India will need to fulfill some more conditions by joining the Bond Index of the Comprehensive World Government. The index provider had put India in its waxed for a few years before deciding to add it to the emerging market bond index.

Read more: Government to roll out credit rating for rural borrowers in six months

Global investors with passive investment strategies buy stocks and bonds in Global Indis, and promises to attract investment in Indian Bond FTSE Russell.

“India is actually a very strategically important market for us in FTSE Russell,” Baset said, who joined as Chief Executive in 2023 and is on his first visit to India. “In the London Stock Exchange Group (LSEG), we employ 7,000 people in India, making India the biggest employee of the organization globally.”

Global Benchmark provider FTSE Russell is completely owned by the London Stock Exchange Group.

India has made some lead in joining the global bond indices. In March 2024, Bloomberg Said that it will add a set of bonds of the Government of India Emerging market indexBloomberg’s inclusion came after about seven months after JP Morgan decided to incorporate India’s securities available under the fully accessible route (FAR) in its GBI-EM Global Index Suit from 28 June 2024.

Harman of FTSE Russell said that one of the big catalysts for inclusion was a foreign remote bond program in India which made it easy for foreign investors to reach the market. “There was still some friction around the processes of the account opening and taxation that gradually improved,” he said.

Far away as a major catalyst

In 2020, there is a separate channel away that allows non-residents to invest in securities of the Government of India without investing invested without investment roof. Data by National Securities Depository Limited (NSDL) showed net investment by foreign portfolio investors in remote securities of $ 3.4 billion in 2024. The number was $ 1.7 billion so far in February.

“Currently, India does not meet some mechanical norms to include FTSE World Government Bond Index. It meets the requirement of the size of the market, but for example there is not enough high credit rating and also clarity is an important thing, so it is something that I think will be important. These are some of some of the slight nuances that will need to be addressed for a level two for this, ”Harman said.

China is a part of the FTSE World Government Bond Index and Harman said that it took three to four years to graduate for China from the emerging market index. India, he said, is definitely on that trajectory. ,[But] There is still a proper way to be comparable with UK Gilts or US Treasury Market. ,

Read more: Do not allow uneven access to credit in the way of Vikasit Bharat