JP Morgan's active funds, which constitute a significant portion of over $300 billion in assets under management (AUM), are set to shape India's economy starting from December. The key event behind this development is the forthcoming inclusion of India in the GBI-EM Global Index suite from June 2024.
The country's inclusion in the index suite will allow a 10% maximum weight in GBI-EM GD, a move that incorporates government bonds sanctioned by the Reserve Bank of India (RBI). This development will provide a significant boost to India's financial markets and is expected to attract substantial foreign investments.
In addition to the index inclusion, ongoing dialogues between investors and the finance ministry on tax structures are also playing a crucial role. These discussions involve operational procedures related to tax certificates and the potential use of Euroclear, a Belgium-based clearing platform.
These factors combined are expected to have a profound impact on the Indian economy, with JP Morgan's active funds playing a pivotal role in this transformation. The bank's index managers and registered Foreign Portfolio Investors (FPIs) are set to guide these funds, further underlining their influence on the country's economic landscape.
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