Why Bloomberg has delayed Indian bonds' inclusion in global index
What's the story
Bloomberg Index Services has delayed the inclusion of Indian bonds in its Global Aggregate Index. The decision has disappointed many investors who were expecting this move. The news also resulted in a spike in bond yields. India's 10-year benchmark bond yield rose by as much as six basis points to 6.64% after the announcement was made.
Market progression
Indian bonds' journey to global investment grade benchmarks
The decision comes as Indian bonds have been gradually included in major emerging-market benchmarks. These include the JPMorgan Emerging Market Local Currency Index in June 2024, the Bloomberg Emerging Market Local Currency Bond Index in January last year, and the FTSE Russell Emerging Market Index in September 2025. Despite this progress, Bloomberg cited operational and market-infrastructure issues as reasons for further evaluation before inclusion in its flagship global investment-grade index.
Operational challenges
Concerns raised during Bloomberg's consultation
Bloomberg's consultation on adding Indian government bonds to its Global Aggregate Index flagged concerns over post-trade tax-related settlement delays, limited automation in trading workflows, and lengthy fund registration. While acknowledging India's market reforms, respondents emphasized that broader benchmark inclusion requires higher operational efficiency. The feedback shall inform Bloomberg's next update in mid-2026, highlighting operational gaps seen as critical by global investors before these securities can join a broad investor base benchmark.
Market forecast
India's bond market outlook
The decision to delay inclusion comes as India seeks to attract higher foreign capital into its rapidly growing government bond market. Inclusion in a global benchmark might bring billions of dollars in passive inflows. However, geopolitical risks and rising oil prices further complicate the outlook for Indian bonds. Investors are now monitoring the escalating tensions between US President Donald Trump and the US Federal Reserve, as well as developments in Iran.