Bond market: Why foreign funds are flocking to India despite entry barriers

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India’s $1.3 trillion sovereign debt market has attracted significant global investor interest, particularly as its bonds are set to join JPMorgan Chase & Co’s main emerging market debt index. However, foreign investors face numerous challenges, including extensive documentation, complex trade settlement processes, and intricate tax regulations. Indian authorities, wary of the rapid capital inflows that contributed to the Asian financial crisis, have not offered tax concessions like China did before joining major debt indexes.