JP Morgan's decision to include India in its Government Bond Index-Emerging Markets (GBI-EM) is poised to bring substantial economic benefits to the country. This move is expected to reduce the government's borrowing costs, boost the Indian rupee and bond markets, improve the nation's credit rating, and stimulate economic growth.
Billions of dollars in foreign investments are predicted to flow into India's debt market, reinforcing its position as an attractive investment destination. This inclusion could also lead to further internationalization of the Indian rupee and potential inclusion in other bond indices, solidifying India's status as a global investment hub. While the benefits are significant, experts warn of potential inflationary risks that must be managed carefully.