India mulling simplified rules for government bonds’ exclusive foreigners investors, official says

The Securities and Exchange Board of India is working on allowing simplified registration rules for foreigners investing only in government bonds, an official with the markets regulator saidonTuesday.

"For foreign funds investing in only government bonds, given that India's debt has been included in global indices, we are trying to make the registration process for them a lot more easier," said Ananth Narayan, a whole-time member at the Securities and Exchange Board of India (SEBI).

The regulator is working on "light-touch" registration processes for such investors, said Narayan, adding that details that are required from equity investors may not be needed if investments are being made only in government bonds.

Foreign investment in Indian government bonds has risen sharply since September 2023, when J.P. Morgan announced the inclusion of India in its debt indexes.

The inclusion is bringing in passive bond investors to the local markets.

So far this year, foreign investors have invested a net of $13 billion in the Indian bond markets, with a majority of the flows coming into government securities included in the J.P. Morgan indices.