India Government bonds, now a part of JP Morgan's global bond index!

Will this lead to billions of dollars in foreign investments in India? Let’s take a deep dive…
The News:
India, after spending nearly two years in JP Morgan’s “watchlist” zone, has been included in the investment bank’s flagship Government Bond Index – Emerging Market (GBI EM)

But why does it matter?

First, let’s understand what are Government Bonds:

Bonds are a fixed income instrument like a fixed deposit. While in fixed deposits, you receive a predetermined “interest rate” against your investments, the interest you get for investing in a bond is called the “Coupon Rate”
India’s benchmark 10-year bond maturing in 2033 has a “coupon rate” of 7.18%, which is higher than SBI’s 10 year fixed deposit interest rate of 6.5%.

Will this have a positive impact?

Expectations are that India’s inclusion in the global bond index will drive billions of foreign fund flows into Indian bond markets. Along with bond markets, there are hopes of positive spillover effects towards Indian equity markets too, especially banking stocks. 
Remember the Nifty50 hitting its 20,000 mark recently? A huge influx of foreign funds into our markets has been a significant reason for that to happen, and this influx of funds might stand to rise going ahead!
The Nifty PSU Bank index - which includes Government banks like SBI and Bank of Baroda - rose 2% on September 22, 2023. 

Why Banking stocks gain you wonder? Commercial and Govt. Banks in India are mandated to invest in Govt. bonds. And since the JP Morgan inclusion is expected to push India bond prices higher, banks will stand to benefit. 
Are there any other benefits?

The Indian rupee will be a clear winner here. It's simple economics: Dollar inflows into India strengthens the rupee, dollar outflows weakens the rupee. 
Are there other international bond indexes and will India be a part of them?
London’s FTSE Russell, a major index provider, is also considering the inclusion of India's bonds in its emerging market bond index.
Financial data behemoth, Bloomberg is also likely to include India bonds in its Global Aggregate Bonds Index, which according to calculations by IDFC First Bank could bring in additional foreign inflows of $15-20 billion.