How India’s much-hyped global bond index inclusion unravelled

Stalled progress: Pedestrians watch a digital screen relaying the budget speech by Sitharaman on the facade of the Bombay Stock Exchange in Mumbai. Local debt markets saw the sharpest sell-off in almost two years since the budget speech. — AFP

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 US$1 trillion (RM4.23 trillion) market. Banks penciled in inflows of as much as US$40bil (RM169bil) 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.