Some of the largest exchange-traded fund (ETF) providers are positioning themselves to capture the billions of dollars set to flow into Indian bonds, following their inclusion in major global indices. BlackRock, Amundi, and Janus Henderson’s Tabula Investment Management are among those launching new ETFs to capitalize on India’s growing appeal. JPMorgan’s decision last year to add Indian debt to its key emerging-market index is a game-changer, with estimates from DWS Group suggesting that such ETFs could attract $5 billion to $10 billion in the medium term.
“India is too big to ignore,” says Benoit Sorel, Amundi’s global head of ETF, indexing, and smart beta. Sorel emphasized that India is becoming a crucial allocation for emerging-market debt, with initial interest coming from professional investors.
India’s weight in JPMorgan’s emerging-markets bond index will increase from 4% to 10% by March, and its securities are also set to be included in indices owned by FTSE Russell and Bloomberg. This shift is expected to inject billions into India’s bond market, which has largely been insulated from global fluctuations.
While some remain skeptical, such as UBS Asset Management’s Shamaila Khan, who believes Indian debt is currently “too crowded,” others see significant long-term potential. BlackRock highlights the accessibility of Indian bond ETFs, which help investors navigate the country’s bureaucratic hurdles.
With India offering one of the highest bond yields in Asia, it’s clear why the world’s largest asset managers are focused on this growing market.