Amid growing border tensions, the Finance Ministry has proposed restrictions on pension fund investments from any of the countries that share borders with India.
Foreign investment in funds regulated by the Pension Fund Regulatory and Development Authority is capped at 49% under the automatic route. A draft notification on Friday stated, “A government approval would be required for the investing entity or individual from any of the neighbour country including China. The relevant provisions of FDI policy issued from time to time would apply in all such cases.”
Any foreign investment from these countries will be subject to approval from the government.
The restriction would be applicable from the date of notification by the Government of India.
Stakeholders can submit their comments on the draft within 30 days, it added.
The changes have been proposed in accordance with Department for Promotion of Industry and Internal Trade (DPIIT) guidelines issued in April.
Currently, government permission is mandatory only for investments coming from Bangladesh and Pakistan.