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    Question

    Which bond index India’s Govt bonds are likely to be included this year?

    A MSCI Govt Bond Index-Emerging Markets Correct Answer Incorrect Answer
    B JP Morgan Govt bond index-Emerging Markets Correct Answer Incorrect Answer
    C Moody’s Govt Bond Index-Emerging Markets Correct Answer Incorrect Answer
    D S&P Govt Bond Index-Emerging Market Correct Answer Incorrect Answer
    E None of these Correct Answer Incorrect Answer

    Solution

    India is the second largest bond market (at 1.1tn) within emerging markets that’s not covered by global bond indices, but this might change soon as Russia’s recent exclusion paves way for India’s inclusion in global bond indices. India has been working since 2019 to be included in global bond indices as the government borrowings rise and desire to fuel investments requires capital flows. With Covid hitting in 2020 the borrowing rose further and the need for liquidity from external sources gained. According to the estimates G-sec will have 10% weight in the JP Morgan Government Bond Index-Emerging Markets. 

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