London: State Bank of India (SBI) on Friday launched India's first bond index series for overseas investors at the London Stock Exchange (LSE).


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The FTSE SBI Bond Index Series, launched by India's largest commercial bank along with global index and data provider FTSE Russell, is positioned as a first-of-its-kind transparent benchmark for investors in international markets to analyse India's government bond market.


"In respect of the Indian government bond market, we didn't have any international indices on which the international investors could take a call. With the launch of this index alongside FTSE Russell, our intention is to give people a benchmark based on which they can make investment calls," SBI Chairman Arundhati Bhattacharya said at the launch ceremony at the LSE on Friday.


The FTSE SBI Bond Index Series "demonstrates SBI's commitment to play befitting leadership role" in development of India's bond market, SBI said in a statement.


The launch follows the November 2015 visit of Prime Minister Narendra Modi in the UK when a letter of intent was singed between SBI and FTSE to jointly develop the new index tracking Indian fixed income securities.


The Indian bond market is worth around $1.7 trillion.


While there are no specific products linked to the index as yet, SBI has plans to come out with an exchange-traded fund (ETF) over the next 4-5 months.


"We are hopeful that the LSE will help us in getting a few products in. We have already approached the capital market regulator in India to allow us to use this index in order to launch an ETF. But even though there may not be products in the interim, we still expect the index to be used by investors as a benchmark," Bhattacharya explained.


The launch has been described by the LSE as an "innovative" move, which demonstrates significant progress in the development of India's bond market, a priority of the India UK Financial Partnership (IUKFP).


"India has a significant domestic bond market that continues to see strong demand from foreign investors. This partnership with SBI, a leading Indian bank, enables us to be at the forefront of fixed income index innovations in India and we look forward to further developing index products that can create greater awareness and foster liquidity across the India domestic fixed income spectrum," said Waqas Samad, CEO of Fixed Income and Multi Asset at FTSE Russell, which is ranked among the top three fixed income index providers globally.


London's financial hub, the City of London, welcomed the SBI launch as a symbol of the city?s importance for the Indian financial industry.


Sherry Madera, City of London Corporation, special advisor for Asia, said: "SBI has been a long-standing partner in the City since 1921, establishing its first international office and successfully expanding its business to now within 35 countries across the globe."


Madera added: "The City of London is delighted to welcome the FTSE Russell State Bank of Indian Bond Index Series and considers it an excellent example of London's commitment to the Indian financial markets and offering tools and products for international investors seeking exposure in India."