India G-Secs index delay temporary, not structural: Motilal Oswal

Financial veteran Motilal Oswal called Bloomberg's delay on including India's G-Secs in its global index a 'temporary operational pause,' not a structural flaw, expressing optimism that inclusion could happen within the next three months.

Financial veteran Motilal Oswal dismissed concerns over Bloomberg's decision to delay the inclusion of India's Government Securities (G-Secs) in its Global Aggregate Index, calling it a temporary operational pause rather than a reflection of structural flaws.

G-Secs Index Inclusion Delay a 'Temporary Pause'

"I don't fully agree with their rationale," Oswal said in an interview with ANI on the sidelines of the 9th edition of the Motilal Oswal Business Impact Conference (MOBIC) 2026 in Mumbai on Saturday. "Short-term operational hiccups or foreign investor onboarding delays may exist, but India's debt market cannot be ignored in the medium to long term."

Operational Hiccups and Global Factors Cited

Oswal acknowledged that global index providers need time to assess foreign participation workflows but stressed India's technical strengths. "They have explicitly acknowledged that India's recent market reforms are positive, but stated they need a bit more time to observe smooth operational workflows for foreign investors -- despite India having one of the fastest transaction processing systems globally," he said, adding that external factors and global market volatility likely influenced the decision.

"Given current geopolitical instability, particularly surrounding oil and Iran, they may have postponed inclusion out of caution, but it is purely a short-term delay," Oswal noted.

Optimism for Future Inclusion and Market Trends

Despite the setback, he expressed confidence that index managers will revisit the inclusion once foreign onboarding stabilizes. "I remain quite optimistic that index providers will have to reconsider bringing Indian G-Secs into the index, perhaps within the next three months," he said.

On wider market trends, Motilal Oswal pointed out that foreign investors are returning to Indian equities driven by value buying as corporate earnings and the currency outlook continue to strengthen. (ANI)

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