MUMBAI (Reuters) - BlackRock Inc, the world's largest fund manager, is looking to raise its share in India's $500 billion pool of fully investible government bonds via recently launched exchange traded funds (ETFs), a fixed income strategist at the firm said.

These bonds, which have been placed under a Fully Accessible Route (FAR) and have no foreign investment limits, will be included in JPMorgan's emerging market debt index starting June and have been drawing interest from foreign money managers.

Globally, ETFs hold about 2% of outstanding bonds, said Hui Sien Koay, lead index, fixed income strategist for APAC at BlackRock, in an interview with Reuters on Wednesday.

BlackRock leads the global ETF space with a nearly 40% market share.

"If we consider that as a barometer, and the total (India) FAR bond market size, it stands at around $500 billion, which is our opportunity set, and if we consider 2% of that, it would be a realistic commercial goal for us (as an industry)," she said.

BlackRock launched its India bond ETF in February and currently has $26 million of assets under management in this fund. The ETF has the cheapest fee among peers, with a weighted average yield of 7.14%, according to latest disclosures.

BlackRock has expertise in "tricky markets" like India and helps investors work through issues such as trade execution and minimisation of tax, said Koay.

"I think we do have an edge due to this."

India's entry into global bond indices was discussed for nearly a decade but issues such restrictions on foreign investors and local taxation delayed it.

Over the next eight months, Indian bonds will be included in JPMorgan and Bloomberg's emerging market debt indices, but the FTSE Russell is yet to include domestic bonds.

The inclusion comes against a favorable macroeconomic backdrop with the Indian economy seeing high growth, a stable currency and relatively higher yields.

India "stands out" with yields higher than any other BBB-rated country, Koay said.

"Since the rupee has been relatively stable, we are quite sanguine about it, because it has got a lot of tailwinds, so we are bullish for now (on India)," she said.

BlackRock is drawing investors using marketing campaigns offering investment options across asset classes.

"The marketing campaign is focused on India as one of the main priority themes for this year," Koay said.

(Reporting by Dharamraj Dhutia; Editing by Sonia Cheema)

By Dharamraj Dhutia