(Bloomberg) -- FTSE Russell said it will keep South Korea on the watch list for inclusion to its global bond index — and India for the emerging-market equivalent — prolonging the countries’ wait to get into key market gauges. 

Korean authorities are undertaking initiatives to improve the structure and accessibility of its capital markets which require local laws and regulations to be amended and may not be complete until 2024, FTSE said in a statement on Thursday. The index provider will seek evidence from market participants on the efficacy of the enhancements and whether they’re operating as intended prior to any reclassification decision, it said. 

Korean policymakers have been pushing to get the country into global bond and stock indexes, which Goldman Sachs Group Inc. analysts suggested may attract an estimated $116 billion of foreign inflows. The addition to the WGBI alone would lure up to 90 trillion won ($69 billion) of inflows, the Korean government has said, citing estimates from investment banks.

Read More: Korea Expands Currency Market Access to Aid Index Inclusion Bids

“South Korea’s index inclusion is more likely to happen in September then this time around,” Kang Seungwon, a fixed-income strategist at NH Investment & Securities Co., said before the announcement. It is too early for an inclusion considering it normally takes more than six months from the point the country is added to the watchlist, Kang said.

The government will continue to improve its systems and closely communicate with global investors so the country is possibly added to the WGBI this year, the finance ministry said in a statement following FTSE’s announcement.

Korea’s three-year yield rose one basis point to 3.25% on Friday, while the yield on the 10-year government bond climbed one basis point to 3.32%. 

In India, FTSE continues to note feedback from investors regarding areas for improvement of its market structure, including efficient foreign investor registration and operational issues regarding the settlement cycle, trade matching and tax clearance, the statement said. “FTSE will continue its dialog with the Reserve Bank of India and seek feedback from market participants on their practical experiences of the evolution of the market structure,” the company said.

Read More: What Adding India to Global Bond Indexes Would Mean: QuickTake

Bond traders were not expecting the inclusion of India in this review after New Delhi seemed to cool on the idea amid global market volatility. India shouldn’t be looking at inclusion at the current juncture given the global situation, Department of Economic Affairs Secretary Ajay Seth said in February.  

An inclusion would have paved the way for higher foreign inflows and helped the government’s plan to borrow 15.4 trillion rupees ($187 billion) in the fiscal year starting April. 

--With assistance from Matthew Burgess and Marcus Wong.

(Updates fifth and sixth paragraphs with comments from Korean government and Korean bond yields)

©2023 Bloomberg L.P.