DIPP Notifies 49% FDI in Pension Sector

The Government has raised the limit of Foreign Direct Investment (“FDI”) in the pension sector to 49% in line with the FDI cap in the insurance sector. A press note to this effect was issued by the Department of Industrial Policy and Promotion (“DIPP”) on 27th April, 2015. The FDI cap in the sector hiked to 49% includes foreign investment in the forms of FPI (Foreign Portfolio Investors), FII (Foreign Institutional Investors) ,QFI (Qualified Foreign Investor), FVCI (Foreign Venture Capital Investor), NRI (Non-Resident Indians) and DR (Depositary Receipts).

Accordingly no Government approval is required till 26% but Foreign Investment Promotion Board nod would be needed for investment beyond 26% and up to the cap of 49%. FDI in pension funds was allowed as per the Pension Fund Regulatory and Development Authority (PFRDA) Act, 2013.

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