How India’s Much-Hyped Global Bond Index Inclusion Unraveled
- Tax issues, nationalist interests, volatile flows are reasons
- Inclusion on indexes delayed by a year, officials say
Shoppers walk through a market in the Charminar area in Hyderabad, India.
Photographer: Dhiraj Singh/BloombergThis article is for subscribers only.
For months, India prepared for a remarkable milestone: getting its bonds listed on global indexes. Inclusion was perceived as a crucial step change for the $1 trillion market. Banks penciled in inflows of as much as $40 billion for a country that has long lagged behind peers in tapping international wealth.
The timeline seemed so final that Citigroup Inc. advised its clients to buy Indian debt in anticipation that key tax exemptions would be announced to facilitate the change. Policy makers and analysts predicted inclusion as early as April 1, the start of the new financial year.