In 2024, foreign portfolio investors (FPI) have invested more than Rs 1 lakh crore in the Indian debt market since the country was included in JP Morgan’s Emerging Market Government Bond Indices in June.

FPIs continue to show confidence in the Indian debt market, pouring in 11,336 crore in August. As per data from the National Securities Depository Limited (NSDL), FPIs have invested Rs 1,02,354 crore in the Indian debt market since the beginning of 2024.

In May, June, July, and August, foreign investors invested Rs 8,760 crore, Rs 14,955 crore, Rs 22,363 crore, and Rs 11,366 crore, respectively. While foreign investors show a keen interest in the debt market, they withdraw from the equity markets.

Since the start of August, FPIs have withdrawn Rs 16,305 crore from the Indian equity markets. This withdrawal is attributed to Yen Carry Trade, concerns about a US recession, and ongoing geopolitical tensions in the Middle East.

However, in 2024, foreign investors have injected Rs 19,261 crore into the Indian equity markets. Foreign investors’ increased interest in the debt market resulted from Indian bonds being included in the JP Morgan Emerging Market Bond Index in June.

Indian government bonds will hold a 10% weightage in this index. The weightage of Indian government bonds in this index will gradually increase by one per cent each month from June 28 to March 31, 2025.

JP Morgan announced the inclusion of Indian bonds in GBI-EM in September 2023. India’s GDP grew 8.2% in FY 2023-24 and is expected to grow 7.2% in the current financial year.

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