India is confident of getting included in a global bond index by October but it will not be able to raise funds in the coming financial year as the actual listing could take around 12 months after its inclusion, said two senior sources aware of the discussions.

Since 2019, India has been working toward getting included in global bond indexes as rising government borrowing has necessitated opening the largely domestic bond market to a broader investor base. India was hopeful of completing the listing in the upcoming financial year, starting on April 1, as it would help bring down borrowing costs, which have been rising in recent weeks due to a lack of appetite amid high supply, one of the sources said.

The government plans to issue bonds worth $165.24 billion to fund its spending programme in the upcoming fiscal year to revive the pandemic-hit economy from a slump. "The indices will be reviewed in September. We have dealt with most of their concerns, we should be able to resolve the other issues too," said one of the sources, referring to an index provider.

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"We expect to be included in at least one of the two major indexes in September or October," he said. However, he said the actual listing could take longer and would not be concluded before the end of the fiscal year. The finance ministry and the central bank, the Reserve Bank of India, did not immediately respond to requests for comment.

Last September, J.P Morgan opted not to include India's government bonds in one of its flagship emerging market indexes after investors cited problems with capital controls, custody and settlement and other operational snags.

Two other senior officials said India was in the final stages of negotiating with Euroclear for settlement of Indian bonds and that could likely be a precursor for a bond listing as it would allay most investor concerns.