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A majority of clients that follow the J.P. Morgan Emerging Market Bond Index are now registered to trade directly in Indian government bonds, which will be included in the index at the end of this month, an official at the Wall Street Bank said.

"In the case of India, we provided a relatively long lead time before index inclusion starts," Gloria Kim, global head of index research at J.P. Morgan, said in a written response to Reuters.

"This was highly appreciated by clients as it provided them ample time to get their local market access set-up to trade," said Kim, adding that a "handful" of clients are in the process of setting up their accounts.

India's inclusion in global bond indices was discussed for nearly a decade before the inclusion in the widely tracked J.P. Morgan index was finally announced last September.

Its weightage in the index will rise to 10% over a 10-month period starting June 28.

"Assuming an index-neutral position, all else equal, we expect foreign inflows to be between $20-25 billion following index inclusion," Kim said.

An estimated $216 billion in assets under management are benchmarked to the index.

Ahead of the inclusion, foreign investors have bought more than $9 billion in Indian government bonds that fall under the 'fully accessible route' (FAR) and are set to be included in the index.

After initially buying short-term bonds, investors have now pivoted towards longer-term securities, which will have a heavier presence in the index.

These inflows have pushed FPI holdings to above 4% of bonds under the FAR category, from 2.8% before the index-inclusion announcement, said Kim, citing data from India's Clearing Corporation.

The securities most owned by foreigners include the 7.18% 2033 bond, at 11.7%, and the 7.06% 2028 bond, at 9.6%.

India's inclusion in global bond indices was partly delayed due to operational aspects of trading in India, including the central bank's insistence that these securities should be settled locally.

But market feedback on the process of registering to trade in India has so far been "largely positive", said Kim, who sees India-focused bond Exchange Traded Funds and collective investment vehicles offering intra-day liquidity on Indian debt.

"As with any new market inclusion, there are teething issues," Kim said. "However, we have found these to be related mostly to operational readiness and the flexibility of counterparties and custodians rather than barriers to entry."