Bloomberg Index Services Ltd (BISL) on Tuesday delayed including India’s government bonds in its global aggregate index citing operational issues and said it will review the same again by mid-2026. India’s 10-year bond yields rose by 5 basis points (bps) following the announcement.
Indian market participants were expecting BISL to approve including Indian government bonds in the index by February 2026. BISL said responses received from stakeholders on Indian government bond inclusion indicated broad support for the long-term trajectory of the Indian government bond market and for its potential eventual inclusion in global investment grade benchmarks.
Respondents acknowledged the significant progress made in recent years, including improvements in market accessibility and the implementation of the Fully Accessible Route (FAR), which has removed key capital controls and enhanced investability for international investors.
“At the same time, a number of respondents highlighted important operational and market-infrastructure considerations that merit further evaluation before inclusion in a flagship global investment grade index. These considerations include, among others, the current lack of fully automated trading workflows, settlement and repatriation timelines associated with post-trade tax processes, and the complexity and duration of fund registration procedures,” BISL said in a statement.
While such features are more familiar to investors in emerging market strategies — and were assessed as acceptable for inclusion in BISL’s emerging market indices — some respondents noted that the Global Aggregate Index represents a materially broader and more operationally diverse investor base. “In light of this feedback, BISL intends to keep the review of Indian government bonds for the Bloomberg Global Aggregate Index open and ongoing, while continuing to engage with index users, market participants, custodians, regulators, and relevant authorities to better understand further efficiencies that could be made in market infrastructure and post-trade processes,” it said.