Bloomberg on Wednesday offered to help India gain access to global bond indexes, a move that will help Asia’s third-largest economy attract more foreign inflows.
“Bloomberg will help India navigate the processfor gaining inclusion in global market benchmark indexes, so international investors can access India’s bond market,” Founder Michael Bloomberg, who owns Bloomberg Barclay indexes, said in New York at a business forum. Indian Prime Minister Narendra Modi is the key note speaker at the event. The move will “help Indian businesses raise funds, invest and grow and it will help India’s government raise funding infrastructure and public service” Bloomberg said.
Overseas investors have long sought greater access to Indian bonds, drawn by an economy that’s growing at more than 6% a year and yields which are among Asia’s highest. The nation’s debt though are restricted to foreigners, limiting their appeal to funds tracking benchmark indexes.
Getting added into global indexes could bring in billions of dollars, which would help India plug a long-running current-account deficit. Analysts estimate that China’s inclusion in the Bloomberg Barclays Global Aggregate Index this year may spur more than $100 billion of inflows.
“Bloomberg will support the development of international financial services sector in Gujarat,” Bloomberg said. “Bloomberg will host a series of roundtables in India, Asia and beyond with investors from across the world,” he added.
India’s central bank and government though have been wary about the volatility that greater access to global funds would bring to its markets. While the Reserve Bank of India agreed to raise the cap on foreign ownership of government bonds to 6% from 4% by 2020, that still pales in comparison to Indonesia where offshore funds own more than a third of sovereign debt.