New Delhi: According to people familiar with the matter, India is planning some tax exemptions in its February budget, possibly the last step to include the country’s sovereign bonds in the global index.
Finance minister Nirmala Sitharaman will propose to exempt Euroclear settlement from tax, the people said, asking not to be identified as the schemes are private. He said that if MPs approve the budget in time, Indian debt could be eligible to be included in the index by the end of March.
A finance ministry spokesperson was not immediately available for comment.
The change is significant to include Indian bonds as Euroclear does not charge capital gains tax on debt transactions. Settlement of Indian bonds on Euroclear, an international securities platform, has been a major demand for index providers such as JPMorgan Chase & Co.
JP Morgan said last month that India’s inclusion in the Emerging Markets Bond Index could attract foreign investors up to $25 billion.
Bloomberg LP is the parent company of Bloomberg Index Services Limited (BISL), which manages indexes that compete with indexes from other providers.