FTSE Russell, the global index provider, has announced that it will not include India in its government bond index. This decision comes after JPMorgan revealed its plans to incorporate India into its influential GBI-EM index suite starting next year, which is expected to bring in around $23 billion in index-linked investments. However, FTSE Russell stated that areas for improvement in the Indian government bond market structure highlighted by international investors have remained largely unchanged. The inclusion in the FTSE index was anticipated to increase investments by index-linked funds, but the impact on local markets is expected to be minimal. The rupee was trading slightly higher against the US dollar, and the benchmark 7.18% 2033 bond yield eased three basis points. VRC Reddy, treasury head at Karur Vysya Bank, expressed that the expectation of inclusion in the FTSE index was not high, so the local markets may not react significantly. BNP Paribas Asset Management turned more positive on Indian bonds after JPMorgan’s inclusion and expects the benchmark bond yield to ease below 7% by the end of the year. Jean-Charles Sambor, head of emerging markets, fixed income at BNP Paribas Asset Management, also predicted the rupee to ease to 82.00-82.25 per US dollar in six months. FTSE Russell’s decision not to include India indicates the need for further improvements in the country’s government bond market structure.