It is during this great surge that the Foreign Portfolio Investors have already put in more than one lakh crore into the Indian debt market so far in 2024. This was because India was inducted into the JP Morgan's Emerging Market Government Bond Indices in early June, therefore an increased inflow from the investors. Otherwise, their expectations come true when the statistics go on to show that an additional investment of ₹11,336 crore in the Indian debt market is recorded in August, while the same in September has been merely at ₹784 crore.
FPIs have pumped a net ₹1,02,354 crore to Indian debt instruments so far this year, data from NSDL showed. The monthly capture reflected inflows at ₹11,366 crore in August, ₹22,363 crore in July, ₹14,955 crore in June and ₹8,760 crore in May.
It is in the debt market, though, that interest of FPIs seems to be coming in and pulled out money from the equity markets, having pulled out ₹16,305 crore from Indian equities since the beginning of August. It is being said that it's due to Yen Carry Trade; perceived recession in the US economy and geopolitical strife in the Middle East.
It does not seem to deter FPIs from making investments in Indian equity markets till now in 2024, infusing ₹19,261 crore. New investment in the debt market is mainly due to Indian bonds gaining entry into JP Morgan's Emerging Market Bond Index, wherein Indian bonds are expected to account for 10 percent weight in the JP Morgan Emerging Market Bond Index. This would be achieved on a gradual scale, from June 28 through to March 31, 2025, at a rate of one percent every month.
In September this year, JP Morgan said that it will add Indian Papers In GBI-EM Index. Increased foreign interest towards Indian debt, robust growth rate, strong government, fall in inflation, fiscal prudence-The GDP growth rate for the country remained at 8.2 in the year FY 2023-24 and is pegged to grow at 7.2 for the year.
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