(Bloomberg) -- Abrdn Plc is adding exposure to Indian sovereign bonds on attractive yields and amid expectations that their inclusion into global indexes will drive large inflows.

“We’re very positive about India,” said Stephen Bird, chief executive officer of the firm that manages and administers £495 billion ($626 billion) in assets. Still, he sees the market facing some uncertainty ahead of the national elections starting next month.

India’s debt market is projected to attract up to $40 billion of new money with JPMorgan Chase & Co set to add the country’s bonds into its indexes from June. Foreigners currently hold just a fraction of Indian debt.

Bloomberg Index Services Ltd. will also include some India bonds in its emerging market local currency index starting next year. Bloomberg LP is the parent company of Bloomberg Index Services Ltd., which administers indexes that compete with those from other service providers.

The benchmark 10-year yield closed at 7.09% on Friday, after falling to a nine-month low of around 7% earlier in March. The yield can drop to 6.78% by year-end, according to a Bloomberg poll of strategists.

Overall, Bird expects emerging markets to perform better when the Federal Reserve starts its easing cycle. “When rates come off, which they will, that historically EM starts to do better and we think that investors need to prepare for that,” he added.

Here are some more views from Bird: 

• Favors local-currency government bonds in Asia due to their “very good return,” in addition to investment-grade credit
• Less confident about high-yield because it’s “priced to perfection”
• Positive about tech stocks in Taiwan and Korea, which lead digitization and electrification; positive about Japan equities
• Monetary policy easing in South America offers good prospects in local-currency bonds in that region

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