In a move that could be seen as a surprise, India is reportedly postponing efforts to usher more of its bonds into major emerging market indices.

In October 2013, it was reported that India was in talks with J.P. Morgan, Barclays and Citigroup about gaining entry into those banks’ emerging markets bond indices. Some media outlets reported India preferred to gain admission to J.P. Morgan’s index, but that Indian authorities were also holding talks with Barclays and Citi. [Your EM Bond ETF Could Add This Country]

The iShares J.P. Morgan USD Emerging Markets Bond ETF (NYSEArca: EMB), the largest emerging markets bond ETF, tracks a J.P. Morgan index.

On Tuesday, reports broke that India’s designs on a larger presence in emerging market debt indices have been delayed. “As regards the issue of India’s plan to enter into JP Morgan debt index and other global indices, no action is being envisaged,” Reuters reported, citing an unidentified official.

Although foreign investors, such as pensions plans, endowments and sovereign wealth funds, have recently been buying Indian equities, accessing the country’s bonds is harder compared to some other developing markets.  “Foreign holdings in Indian public debt are expected to decline to around 4 percent by end-March to $728 billion, from 5.2 percent two years ago,” according to Reuters. [Some Investors Returning to India]

To this point, India has been excluded from major global debt indices because of its restrictions on foreign investment in onshore debt.

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