Free Press Journal

Government hikes FDI limit in pension sector to 49 percent

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New Delhi: The Indian government on Monday raised the limit of foreign direct investment (FDI) in the pension sector to 49 percent in line with the FDI cap raised recently in the insurance sector.

“In pursuance of the enactment of Insurance Regulatory & Development Authority Act, 2013, government has decided to permit FDI in the pension sector. The decision will take immediate effect,” said the press note through which the department of industrial policy and promotion (DIPP) gives effect to new FDI policies or changes in existing ones.

The FDI ceiling in the sector has been hiked to 49 percent which includes foreign investment in the forms of FPI, FII, QFI, FVCI, NRI and DR.


No government approval is required till 26 percent, but the Foreign Investment Promotion Board (FIPB) approval would be needed for investment beyond 26 percent and up to the cap of 49 percent, the press note said.

All investments in the pension sector, however, will have to abide by the pension sector regulator the Pension Fund Regulatory and Development Authority (PFRDA).

Through an ordinance in December last year, the government had allowed 49 percent FDI. The ordinance was later converted into law by parliament.