FTSE Russell is set to include South Korea and India in its key global bond indices, enhancing the two markets’ appeal to international investors.

Announcing the results of its September 2024 semi-annual country classification review, the global index provider says South Korean government bonds will be included in the FTSE World Government Bond Index ( WGBI ), with the process beginning in November 2025. The decision comes after extensive reforms in South Korea's capital markets, which have improved market accessibility since being placed on the watch list in 2022.

Among the notable measures taken included connecting with the International Central Securities Depositaries in mid-2024, and enabling third-party foreign exchange for the Korean won from July 2024. These initiatives are expected to attract significant foreign investment into the country's bond market.

South Korea’s finance minister Sang-Mok Choi welcomed the inclusion, highlighting the government’s commitment to enhancing market accessibility and supporting international investment. “The successful implementation of capital market reforms over the past two years has paved the way for this decision,” Choi says.

“FTSE Russell has closely monitored the capital markets reforms that have been implemented by South Korean market authorities over the past two years and their effectiveness in achieving the rigorous accessibility criteria for WGBI inclusion. We look forward to continuing to support the market as it undertakes readiness activities ahead of index inclusion at the end of next year,” says Nikki Stefanelli, head of fixed income, currencies and commodities index policy at FTSE Russell.

India will join the FTSE Emerging Markets Government Bond Index ( EMGBI ), starting in September 2025. The inclusion reflects ongoing efforts by Indian authorities to make the country's bond market more accessible to global investors. The Reserve Bank of India’s continuous engagement with FTSE Russell played a key role in facilitating this upgrade.

Upon their inclusion, South Korean government bonds will represent 2.22% of WGBI on a market value-weighted basis while Indian government bonds will represent 9.35% of EMGBI, according to FTSE Russell. The market value of the EMGBI is US$4.7 trillion.

The changes are part of the index provider’s ongoing efforts to ensure its indices reflect evolving market conditions and accessibility standards, enabling investors to better navigate global markets.

The next classification update is scheduled for April 2025, which may bring further enhancements to the inclusion criteria for emerging markets in Asia.

In September 2023, J.P. Morgan announced India's inclusion in the JPMorgan Government Bond Index-Emerging Markets. India's government bonds will also be added to Bloomberg's Emerging Market Local Currency Government Index starting January 31 2025.