By Aftab Ahmed and Rodrigo Campos
(Reuters) -India remains on the radar for inclusion in JPMorgan's influential emerging market local currency debt index after a review on Tuesday, the bank said, dashing hopes that Asia's third largest economy would be added this year.
Some investors had hoped the Wall Street bank would move towards including Indian bonds this year, following Russia's exit from the GBI-EM benchmark tracked by an estimated $240 billion of funds globally.
But others cited investment hurdles "including a lengthy investor registration process and the operational readiness required for trading, settlement and custody of assets onshore," said JPMorgan in a statement.
Last week, Reuters reported that India's long wait to win inclusion in the index was set to be pushed out into next year due to a number of issues.
India said last month it wants global bond index operators to consider the local settlement of its government securities if they are included in their indexes.
The Indian government began considering listing its debt in global indexes in 2019 and has been in discussions with JPMorgan and Bloomberg Fixed Income Indices, while also talking to Euroclear about clearing and settlement.
India is one of the largest bond markets among emerging-market economies with more than $800 billion in outstanding debt.
JPMorgan only began considering India's inclusion in its global bond index in 2021, a year after it began including China yuan-denominated debt.
Global index provider FTSE Russell said on Sept. 30 that it deferred including India in its FTSE Emerging Markets Government Bond Index.
(Reporting by Aftab Ahmed in New Delhi and Rodrigo Campos in New York; Editing by Chizu Nomiyama and Richard Chang)