FTSE Russell, a global index provider, has partnered with State Bank of India, India’s largest bank, to develop a new index tracking Indian fixed income securities. State Bank of India intends to use the FTSE SBI Indian Bond Index as the basis for a new investment product, in addition, the index could be used as the underlying for exchange-traded funds from other issuers looking to provide international investors with a passive means to access India’s developing economy.

The index aims to provide a credible global benchmark for passive investment funds that captures the Indian growth story.

“Despite investor appetite to access India’s ongoing growth story, at present Indian issuers’ bonds do not have a credible global benchmark for passive investment funds that captures the Indian growth story,” said Smt. Arundhati Bhattacharya, Chairman, State Bank of India.

He added: “The FTSE SBI Indian Bond indices will be a catalyst in the ongoing development and deepening of Indian sovereign and corporate bond markets. It will provide a benchmark for attracting passive funds into Indian bonds as an asset class. Further, it will contribute to bond liquidity and dynamic pricing, as well as enable the evolution of the secondary market for Indian issuers’ bonds.”

The index will be the first product from FTSE TMX Global Debt Capital Markets, the firm’s fixed income index arm, dedicated to Indian fixed income securities and the partnership provides FTSE Russell, and parent company London Stock Exchange Group (LSEG), with an important platform in India’s burgeoning domestic financial market.

Donald Keith, Deputy CEO, FTSE Russell said: “This is an important step for FTSE Russell and LSEG as a whole, providing us with a strong platform and strategic alliance for building our presence in India. Together with State Bank of India, we will provide the tools to build investment in India, developing deeper pools of international liquidity in the sovereign and corporate bond markets.”