India and South Korea Set to Join FTSE Russell EMGB Index in 2025

Global index provider FTSE Russell has announced that India’s sovereign bonds will be included in its Emerging Markets Government Bond Index (EMGBI) starting September 2025. This follows similar inclusions by JP Morgan and Bloomberg Index Services, which could potentially attract billions of dollars into India’s local bond market.

Additionally, South Korean government bonds are set to be added to the FTSE World Government Bond Index (WGBI) in November 2025 after spending two years on the watch list.

Key Points

Inclusion of Indian Bonds

• India’s sovereign bonds will be part of the FTSE Russell EMGBI beginning September 2025.
• Indian securities will account for 9.35% of the index on a market-value weighted basis.

Progress and Challenges

• FTSE Russell had previously deferred inclusion of Indian bonds due to taxation, registration, and settlement issues.
• The recent announcement acknowledges improvements in the accessibility of Indian securities, paving the way for inclusion.

South Korean Bonds in FTSE WGBI

• South Korean government bonds will be included in the FTSE World Government Bond Index beginning in November 2025.
• They will represent 2.22% of the WGBI on a market value-weighted basis.

Context of Inclusion

• The inclusion of Indian bonds in FTSE Russell follows announcements from JP Morgan and Bloomberg Index Services. 
• Indian bonds will join JP Morgan’s Government Bond Index-Emerging Markets in June 2024.
• They will also be included in Bloomberg Index Services’ Emerging Market Local Currency index starting in January 2025.

Impact on Local Markets

• The inclusion of these bonds in major indices is expected to enhance the visibility and attractiveness of India’s bond market to global investors.
• The potential inflow of billions of dollars could bolster India’s financial markets and contribute to overall economic growth.