Top leadership at Motilal Oswal Financial Services has dismissed concerns regarding Bloomberg Index Services’ decision to defer the inclusion of Indian Government Securities (G-Secs) in its flagship Global Aggregate Bond Index, describing the setback as a temporary operational pause rather than a reflection of structural flaws.
Speaking at the 9th edition of the Motilal Oswal Business Impact Conference (MOBIC 2026), market veterans Motilal Oswal and Raamdeo Agrawal expressed strong confidence that international benchmark managers will revisit Indian sovereign debt for index inclusion within the next few months.
Key Takeaways
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Temporary Pause: Financial veteran Motilal Oswal characterized Bloomberg’s delay as a short-term operational check rather than a rejection, noting that India’s underlying economic fundamentals and debt market liquidity remain robust.
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Timeline Expectations: Oswal expressed optimism that Bloomberg Index Services will reconsider bringing Indian G-Secs into the flagship index within the next three months.
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Reason for Deferral: Bloomberg Index Services cited the need for additional time to observe the on-ground execution of recent market reforms—specifically foreign investor onboarding, automated trading workflows, and post-trade tax settlement procedures—despite acknowledging recent tax exemptions on interest and capital gains for foreign investors.
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Inflow Projections: Inclusion in the Bloomberg Global Aggregate Index is widely expected to unlock $15 billion to $25 billion in passive long-term foreign inflows once finalized.
Market Leaders Weight In
“They have explicitly acknowledged that India’s recent market reforms are positive, but stated they need a bit more time to observe smooth operational workflows for foreign investors—despite India having one of the fastest transaction processing systems globally… Given current geopolitical instability, particularly surrounding oil, they may have postponed inclusion out of caution, but it is purely a short-term delay.”
— Motilal Oswal, Chairman & Managing Director, Motilal Oswal Financial Services
“India remains on the watchlist. Even though these are Indian government bonds, global benchmark providers take a short-term, cautious assessment to ensure operational systems and market mechanisms function smoothly before full execution.”
— Raamdeo Agrawal, Chairman, Motilal Oswal Financial Services
Context: India’s Global Bond Index Milestones
Indian sovereign debt has already successfully entered several major emerging market indices over the past two years, demonstrating growing integration into global capital markets:
| Index Provider | Index Name | Inclusion Timeline |
| JPMorgan | GBI-EM Global Diversified Index | Included in June 2024 |
| Bloomberg | Emerging Market Local Currency Index | Included in January 2025 |
| FTSE Russell | EM Government Bond Index (EMGBI) | Included in September 2025 |
| Bloomberg | Global Aggregate Bond Index | Deferred (Under Review) |
Market Impact
Following Bloomberg’s deferral announcement, benchmark 10-year Indian G-Sec yields experienced a minor uptick of 2 to 5 basis points as short-term speculative positioning unwound. However, market analysts and fixed-income strategists maintain that robust domestic institutional liquidity, steady foreign portfolio interest, and strong fiscal consolidation targets will cushion Indian debt yields against sustained sell-offs.
