Finance Ministry proposes restriction on foreign investment in pension funds from China

By: |
Published: June 19, 2020 11:35 PM

Foreign investment in pension funds regulated by the Pension Fund Regulatory and Development Authority (PFRDA) is capped at 49 per cent with automatic route.

india china tension, pension funds from China, Galwan Valley
The restriction should be applicable from the date of notification by the Government of India.

Amidst growing tension between India and China, the finance ministry on Friday proposed putting restrictions on foreign investment in pension funds from any of India’s bordering countries.

Foreign investment in pension funds regulated by the Pension Fund Regulatory and Development Authority (PFRDA) is capped at 49 per cent with automatic route.

According to a draft notification circulated for comments, “A government approval would be required for the investing entity or individual from any of the bordering countries 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 should be applicable from the date of notification by the Government of India.

The development comes at a time when Indian and Chinese armies are engaged in a standoff in Pangong Tso, Galwan Valley, Demchok and Daulat Beg Oldie in eastern Ladakh.

The violent clash stirred anti-China sentiments in the country, with protestors and traders’ bodies calling to boycott Chinese products.

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.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Apps Ban: Difficulty in scanning documents may hit e-KYC, investments; Alternatives you may try
2New NPS account opening rule date extended! Now you need these details from October 1
3Investing in ELSS to save taxes? You have to pay more now to get full tax benefit