India's Bond Market Surpasses $2.69 Trillion Benchmark
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Synopsis
India's bond market hits a significant milestone, reaching a valuation of $2.69 trillion by the end of December 2024, paving the way for the country to become a $7-8 trillion economy within five years.
Key Takeaways
- India's bond market valued at $2.69 trillion.
- Corporate bond segment exceeds $602 billion.
- Global integration expected to attract higher foreign inflows.
- Increased foreign participation anticipated to boost corporate bond investments.
- India poised to join major players in the global bond market.
New Delhi, March 24 (NationPress) India’s bond market achieved a remarkable valuation of $2.69 trillion by the conclusion of December 2024, marking a pivotal milestone in the nation's quest to evolve into a $7-8 trillion economy within the next five years.
The momentum in capital formation in India will increasingly be fueled by the growing bond markets, with the corporate bond sector alone surpassing $602 billion.
This swift expansion of the bond market coincides with India's rising global stature, especially with the inclusion of its government bonds in prominent international indices, as highlighted in the IndiaBonds.com report.
Starting January 31, Indian government bonds began their inclusion in the Bloomberg Emerging Market (EM) Local Currency Government Index, mirroring a similar strategy by JP Morgan, which had incorporated Indian bonds into its index in June 2024.
Data from the Clearing Corporation of India Ltd (CCIL) and the Securities and Exchange Board of India (SEBI) indicates that the ongoing global integration of India’s bond market is set to attract substantial foreign investments.
As India’s Fully Accessible Route (FAR) bonds are integrated into Bloomberg’s EM Index, foreign participation in the segment is anticipated to increase, thereby boosting liquidity and fortifying the nation’s financial framework.
Experts assert that enhanced foreign engagement will significantly uplift corporate bond investments.
The consistent influx of international funds will not only deepen the bond market but also bolster infrastructure and development initiatives vital for India's economic growth.
Upon complete integration into global indices, India is poised to join the ranks of China and South Korea as one of the most significant players in the Bloomberg Emerging Market 10 percent Country Capped Index.
Market analysts predict that this acknowledgment will render Indian bonds increasingly appealing to global investors, further cementing India's status as a burgeoning financial powerhouse.
Reports suggest that robust domestic demand coupled with escalating global confidence in Indian debt instruments will enable the bond market to play a crucial role in realizing the country’s ambitious economic objectives.
