India May Allow Foreign Investment in Pension Funds

August 31, 2011 ( – India may allow foreign investment of up to 26% in the pension sector, giving global players access to roughly a $2 billion pool of assets, according to a news report by Reuters. 

The recommendation by a parliamentary panel on a pending pension bill is the latest strike to economic reforms that have stalled as the government was paralyzed by scandals. 

The government has been taking steps of late to make the country more investment friendly, backing in principle foreign direct investment in multi-brand retail, a reform that has been delayed for years, Reuters said. 

Some of the reform measures, including a proposal to lift the cap on foreign holdings in insurance companies to 49% from 26%, require parliamentary approval. 

Most of the 23 life insurance players in India, nearly all of which have a foreign partner holding a 26% stake, are eager to enter the pension fund market, analysts said.