JPMorgan Chase & Co.’s decision to include Indian government bonds in its emerging markets bond index in 2023 has raised concerns about India’s public finances, particularly its efforts to reduce the budget deficit. India’s combined government fiscal deficit stands at 8.9% of GDP, the highest among 20 countries in JPMorgan’s Government Bond Index-Emerging Markets. As India’s weighting in the index will reach a maximum of 10%, global investors will scrutinize the government’s deficit reduction measures, spending quality, tax collection efficiency, and adherence to fiscal consolidation targets. While India’s foreign exchange reserves and regulatory credibility are positives, the move could expose the economy to greater global financial market influences and volatility.