(Bloomberg) -- Foreign ownership of Indian government bonds will almost double to 4.4% of the outstanding debt over the next year with the nation’s imminent addition to the JPMorgan Chase & Co’s main emerging-market index, the Wall Street bank said.

“We see ample scope for non-resident participation in the local bond market to increase, given it currently sits at one of the lowest levels in EM,” strategists including Sean Kelly and Michael Loh wrote in a note.

The inclusion has the potential to lure $20 billion to $25 billion of global flows to Indian debt, according to Gloria Kim, head of index research at JPMorgan. Overseas investments in sovereign bonds has climbed by $10 billion since September when the bank announced the move. Foreigners own only about 2.5% of the nation’s outstanding government debt.

India will be the 25th market to enter the GBI-EM Global series of indices, with 27 bonds under the Fully Accessible Route eligible for inclusion starting June 28, according to the note. 

The nation’s local debt stock is the largest in emerging markets outside China, with the total outstanding bonds included in the index standing at over $400 billion, the strategists said.

--With assistance from Ronojoy Mazumdar.

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