India’s Govt Bonds Join Global Club: What It Means for You
The bonds of the Indian government have been recently added to JP Morgan’s bond index – Emerging Markets (GBI-EM). So what does this actually mean? Let’s understand more about it.
Bond index is a kind of list which tracks the performance of bonds from various countries. One of the world’s most watched index by investors all over the world is JP Morgan’s index.
How is it influential?
1. Global Attention: The international investors will start to notice Indian bonds more as India is now on this list. Foreign money will increase coming into our country by this.
2. Low Costs of Borrowing: By the increase in investment, Indian government will be able to borrow money at lower interest rates. This can free up funds for various projects of the government.
3. Strong Rupee: Indian rupee will become stronger by the increase in foreign investment. By this imported goods will become cheaper for everyone.
What it brings for Investors?
1. Diversification: Through this, international investors would be able to diversify their investments by including Indian bonds.
2. Higher Returns: As compared to developed countries, Indian bonds provides higher returns.
This is a sign of growing stability and economic strength of India by being a part of this global index. It’s like india got an international stamp of approval. It can boost the confidence of both the investors, local and foreign leading to more investment in the country’s economy.
We can now expect more of global investors to take interest in the Indian bond market after India’s becoming a part of JP Morgan’s bond index. This chapter will be a start of India new growth in financial markets with greater opportunities. This not only puts India on the global investment map but also promises various benefits for the country’s economy and its people.
