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India's Bond Market Deferred from Global Index Over Infrastructure Hurdles

Bloomberg Index Services has deferred the inclusion of Indian government bonds in its flagship Global Aggregate Index following consultation with market participants. While respondents supported India's long-term market development and noted progress like the Fully Accessible Route, they highlighted persistent operational hurdles. These challenges include non-automated trading workflows, complex settlement timelines linked to taxes, and lengthy fund registration. Bloomberg will continue engagement with stakeholders and plans to provide the next update on potential inclusion by mid-2026.

Key Points: India Bond Inclusion in Bloomberg Global Index Deferred to 2026

  • Inclusion deferred after market feedback
  • Concerns over trading and settlement infrastructure
  • Fully Accessible Route (FAR) praised for progress
  • Next review scheduled for mid-2026
2 min read

Bloomberg defers inclusion of Indian bonds in its Global Aggregate Index

Bloomberg defers adding Indian bonds to its flagship Global Aggregate Index, citing operational challenges. A further review is scheduled for mid-2026.

"respondents also raised concerns around operational and market infrastructure challenges that require further assessment - Bloomberg Index Services"

New Delhi, January 13

Bloomberg Index Services on Tuesday deferred the inclusion of Indian bonds in its flagship Global Aggregate Index.

Bloomberg Index Services Limited (BISL) said that it will keep its review of Indian government bonds for potential inclusion in the Bloomberg Global Aggregate Index open and ongoing, following feedback from market participants.

BISL said respondents to its recent consultation expressed broad support for the long-term development of India's government bond market and its eventual inclusion in global investment-grade benchmarks. Market participants acknowledged progress made in recent years, particularly improvements in market accessibility and the implementation of the Fully Accessible Route (FAR), which has eased capital controls and improved investability for foreign investors.

However, respondents also raised concerns around operational and market infrastructure challenges that require further assessment before inclusion in a flagship global investment-grade index. These include the lack of fully automated trading workflows, settlement and repatriation timelines linked to post-trade tax processes, and the complexity and length of fund registration procedures.

While such issues are commonly accepted by investors in emerging market strategies and have been deemed suitable for inclusion in BISL's emerging market indices, some participants noted that the Bloomberg Global Aggregate Index serves a broader and more operationally diverse investor base.

In response, BISL said it will continue to engage with index users, market participants, custodians, regulators, and relevant authorities to assess potential improvements to market infrastructure and post-trade processes.

The index provider said it expects to provide a further update on the review by mid-2026, at which time it will outline next steps regarding potential inclusion. Any decision to include Indian government bonds would be announced well in advance, with at least a one-year gap between announcement and implementation, and inclusion likely to be phased in to ensure orderly market adjustment.

Bloomberg Index Services said it will provide an update in mid-2026.

- ANI

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Reader Comments

P
Priya S
Mid-2026? That's a long wait. But if it means they are giving us time to fix the operational issues properly, then it's for the best. A rushed inclusion that fails would be worse. Hope SEBI and RBI work on the tax and registration hurdles.
R
Rohit P
The FAR route was a good step, but clearly not enough. The feedback from global investors is a reality check. We need more automation and simpler procedures. This deferment is a missed opportunity for attracting billions in passive flows. 😕
S
Sarah B
As someone who invests in global indices, I understand Bloomberg's caution. The Global Aggregate Index is for a very broad set of funds, many of which have strict operational requirements. India's market is promising, but it has to be seamless to join the big leagues.
V
Vikram M
It's good they acknowledged the progress on FAR. The journey is more important than a hasty destination. Let's use this time to build world-class infrastructure. Jai Hind! 🇮🇳
K
Karthik V
The concerns about fund registration and post-trade tax are very real for foreign investors. Our processes are too manual and paper-heavy. Hope this deferment acts as a catalyst for change. The potential foreign investment is too large to ignore.
M
Meera T

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

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