Even as JP Morgan announced its decision last week to include India in its widely tracked emerging market debt index, another global index provider FTSE Russell said on Friday it would not yet include India in a government bond index.

“Areas for improvement in the Indian government bond market structure highlighted by international investors remain largely unchanged from the previous March 2023 review,” FTSE said in its annual country classification review for the FTSE Emerging Markets Government Bond Index (EMGBI)

India was added to the FTSE Fixed Income Country Classification watch list in March 2021.

Issues highlighted

Some of the issues highlighted include the efficiency of Foreign Portfolio Investor (FPI) registration, as well as operational issues related to the settlement cycle, trade matching and tax clearance processes.

“FTSE Russell will continue its valuable dialogue with the Reserve Bank of India and seek feedback from market participants on their practical experiences of the evolution of the market structure,” the statement added.

Market experts said India’s prospects for getting into major bond indices including the Bloomberg Global Aggregate Index and the FTSE Russell World Government Bond Index would depend on becoming compatible with Euroclear for settlement. Madhavi Arora, Economist at Emkay Global Financial in a note last week had said the JP Morgan’s decision does not immediately pave way for inclusion in FTSE and Bloomberg indexes, which have more stringent conditions (FPI taxation/Euroclear).