The government’s tax plan to include sovereign bonds in global indices

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Finance Minister Nirmala Sitharaman may propose to exempt Euroclear regulations from tax.

New Delhi: India is planning tax breaks in its budget in February, perhaps the last step in getting the country’s sovereign bonds included in global indexes, according to people familiar with the matter.

Finance Minister Nirmala Sitharaman will propose to exempt Euroclear regulations from tax, the people said, asking not to be identified because the plans are private. If lawmakers approve the budget on time, Indian debt could be eligible for inclusion in the index by the end of March, they added.

A spokesperson for the finance ministry was not immediately available for comment.

The adjustment is crucial for the inclusion of Indian bonds, as Euroclear does not levy capital gains tax on debt transactions. The settlement of Indian bonds on Euroclear, an international securities platform, has been a key request from index providers such as JPMorgan Chase & Co.

JPMorgan said last month that including India in its emerging markets bond index could attract $ 25 billion in investment from foreign investors.

Bloomberg LP is the parent company of Bloomberg Index Services Ltd. (BISL), which administers indices in competition with indices of other providers.


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