Financial services firm JPMorgan said on Friday that it will include Indian government bonds in its Government Bond Index-Emerging Markets from June 2024, reported Reuters.

A government bond is a debt security issued by a national government to finance public spending or repay old debt. Such bonds are a source of government financing, along with tax revenues.

JPMorgan’s decision to include Indian government bonds in its index could lead to billions of dollars of inflows into the country’s debt market.

The company said that 23 Indian government bonds with a total notional value of $330 billion, or over Rs 27 lakh crore, are eligible to be included in the index.

The Indian government had been considering listing its securities for inclusion in global bond indexes since 2013. However, curbs on foreign investments in Indian debts had prevented the development from taking place.

In April 2020, the Reserve Bank of India introduced securities that were exempt from any restrictions under a “fully accessible route” for foreign investors. This paved the way for the inclusion of India’s government bonds in JPMorgan’s Government Bond Index-Emerging Markets.

Chief Economic Advisor V Anantha Nageswaran said that the decision shows that financial market participants have confidence about India’s growth prospects, The Hindu reported.

“Just as long-term equity investors have been amply rewarded by investing in Indian markets, so will long-term investors in Indian government bonds be,” Nageswaran added.