Some asset owners in the region are reducing riskier assets, while more investors around the world are planning to increase their allocations to government bonds.
The country's move to alter investment caps on sovereign bonds for foreign institutions amid the recent sell-off should help further boost interest in Indian assets, say custody executives.
If they did, they would have done more to make it happen, says Bunt Ghosh. On a separate note, he says Credit Suisse will likely agree more tie-ups with fund houses in emerging markets.
With government bond yields now more likely to rise than fall, investors will need to focus on both yields and credit spreads, says product specialist Mike Story.