Govt not keen to list gilts on global indices now


Informist, Tuesday, Apr 25, 2023

By Sagar Sen and Priyasmita Dutta

NEW DELHI - India is not very keen to list government bonds on global indices now as the disadvantages outweigh benefits, a senior finance ministry official said.

"Money will come in when everything is fine, money will go out when it is bad. It will hit you at the worst time," the official told Informist. "We are not very keen. It is a double-edged sword. It can hurt you in the bad times, and it will help you in the good times. It is not counter-cyclical, it is very cyclical."


The government had in April last year renewed talks on the matter with JP Morgan Chase. However, the proposal was put on the back burner as the index provider kept Indian bonds on its watch list.

The proposal to include Indian bonds in global indices was first announced in the Budget speech for 2021-22 (Apr-Mar). The proposal was almost shelved after the government refused to scrap capital gains tax on offshore settlement of bonds, one of the main demands of index providers. They also insisted on overseas settlement of Indian debt, although this is not a formal condition for inclusion in index.

In an interview to Informist last year, Finance Secretary T.V. Somanathan had said the exemption would have compromised India's interests in negotiations with the Organisation for Economic Co-operation and Development.

Indian domestic market is quite robust and currently there is no need to list the bonds overseas to raise funds, the official said.

The government's gross borrowing programme has almost tripled over the last five years – it is projected to touch 15.43 trln rupees in the current financial year started April from 5.71 trln rupees in 2018-19.  End

Edited by Vandana Hingorani

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