Executive Summary:
This document is a response to a parliamentary question regarding Sovereign Wealth Funds (SWFs) and global pension funds' investments in India. It details the investments made by these funds, steps taken by the government to attract such investments, measures to improve regulatory clarity, and potential expansion of sectors for 100% FDI via the automatic route. The information provided pertains to the last five financial years up to August 18, 2025, with tax exemptions extended until March 31, 2030.
Key Points / Main Content:
* **Investment Overview:**
* SWFs and global pension funds can invest in India through Foreign Direct Investment (FDI) or Foreign Portfolio Investment (FPI).
* FDI inflows from SWFs and global pension funds are not recorded as a distinct category.
* Net FPI data, sector and year-wise, is available in Annexure A.
* **Government Initiatives to Attract Investments:**
* Ongoing review and amendment of FDI policy to enhance India's attractiveness as an investment destination.
* Tax exemptions under Section 10(23FE) of the Income Tax Act extended until March 31, 2030, for notified SWFs and pension funds on specific infrastructure investments.
* The International Financial Services Centre Authority (IFSCA) has provided a specialized framework in International Financial Services Centre (IFSC) to facilitate SWF participation, including exemptions from certain restrictions and removal of investment ceilings in unlisted companies.
* **Regulatory Improvements & Ease of Doing Business:**
* Efforts to remove regulatory barriers, streamline processes, develop infrastructure, improve logistics, and enhance the business environment.
* The Regulatory Compliance Burden (RCB) initiative focuses on simplification, rationalization, digitization, and decriminalization to improve Ease of Doing Business and Ease of Living.
* The Jan Vishwas Amendment of Provisions Act, 2023, decriminalized 183 provisions across 42 Central Acts.
* SEBI has simplified FPI onboarding, permitted FPIs to participate in Exchange Traded Commodity Derivatives, enabled participation by NRIs, OCIs and Resident Indian RIindividuals in SEBI registered FPIs based in IFSCs and provided a framework for reclassification of FPI investment to FDI.
* **FDI Policy:**
* Most sectors, except strategically important ones, are open for 100% FDI under the automatic route.
* The Union Budget 2025 announced a further increase of the FDI sectoral cap for the insurance sector from 74% to 100%.
Impact Analysis:
* **Sovereign Wealth Funds (SWFs) and Global Pension Funds:**
* *Impact:* Benefit from tax exemptions, streamlined regulatory processes, and wider investment avenues, especially in infrastructure and real estate.
* *Action Required:* Monitor policy changes and utilize the facilitated investment frameworks in IFSC to maximize returns and diversify investment portfolios.
* **Government of India:**
* *Impact:* Aims to attract more foreign investment, boost economic growth, and improve infrastructure development through SWF and pension fund participation.
* *Action Required:* Continue to refine FDI policies, reduce regulatory burdens, and promote ease of doing business to maintain India's appeal as an investment destination.
* **Indian Businesses (Infrastructure, Real Estate, etc.):**
* *Impact:* Potential for increased access to capital, enabling expansion, innovation, and project development.
* *Action Required:* Understand the requirements and preferences of SWFs and pension funds to attract their investments.
* **Securities and Exchange Board of India (SEBI):**
* *Impact:* Responsible for regulating and facilitating FPI inflows.
* *Action Required:* Continue to simplify and streamline processes for FPIs and create a favorable investment environment.
Key Entities Referenced
Sovereign Wealth Funds: Investment funds owned by a country's government and used for investment purposes.
Global Pension Funds: Investment funds that provide retirement income to individuals worldwide.
Foreign Direct Investment: An investment made by a firm or individual in one country into business interests located in another country.
Foreign Portfolio Investment: An investment made by an investor in financial assets of a foreign country.
Section 1023FE of the Income Tax Act: A section of the Income Tax Act in India that grants tax exemptions to notified Sovereign Wealth Funds and pension funds on specific investments.
International Financial Services Centre Authority: A statutory authority in India responsible for regulating and developing International Financial Services Centres.
Jan Vishwas Amendment of Provisions Act, 2023: An act by the Central Government of India that decriminalized 183 provisions across 42 Central Acts.
Securities and Exchange Board of India: The regulatory body for the securities market in India.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF ECONOMIC AFFAIRS
LOK SABHA
STARRED QUESTION NO. *341
TO BE ANSWERED ON MONDAY, AUGUST 18, 2025
Sovereign Wealth Funds and Global Pension Funds
*341. Thiru Arun Nehru:
Will the Minister of FINANCE be pleased to state:
(a) the details and the list of the investments through Sovereign Wealth Funds (SWFs)
and global pension funds in the country, sector-wise;
(b) the details of the quantum of Foreign Direct Investment (FDI) or portfolio investment
made by SWFs and global pension funds in the country during the last five financial
years, State and year-wise;
(c) the steps taken by the Government to attract SWFs and global pension funds to
invest in the infrastructure and real estate sectors of the country;
(d) the measures taken by the Government to improve the regulatory clarity for SWFs
and global pension funds investing in the country; and
(e) whether the Government proposes to expand the list of sectors for 100 per cent FDI
through automatic route for long-term investors like SWFs, if so, the details thereof?
ANSWER
FINANCE MINISTER
(SMT. NIRMALA SITHARAMAN)
(a) to (e): A Statement is laid on the table of the House.STATEMENT REFFERED TO IN REPLY TO LOK SABHA STARRED QUESTION NO.
*341 RAISED BY THIRU ARUN NEHRU, HON’BLE MEMBER OF PARLIAMENT TO
BE ANSWERED ON 18.08.2025 REGARDING SOVEREIGN WEALTH FUNDS AND
GLOBAL PENSION FUNDS.
(a) & (b). Sovereign Wealth Funds (SWFs) and global pension funds can invest into
country as Foreign Direct Investment (FDI) or Foreign Portfolio Investment (FPI). FDI
inflows from SWFs and global pension funds are not recorded as distinct category. Net
FPI by SWFs and global pension funds in the country during the last five financial years,
sector and year-wise are at Annexure-A.
(c) The FDI policy is reviewed on an ongoing basis, and amended from time to time to
ensure that India remains an increasingly attractive and investor-friendly investment
destination for long term investors including SWFs and global pension funds.Some of
the specific benefits provided to notified SWFs and pension funds include:
(i) Section 10(23FE)of the Income Tax Act, introduced in 2020, grants tax exemption, to
notified SWFs and pension funds on dividends, interest, and long-term capital gains
from specified infrastructure investments in India.This exemption has now been
extended until 31 March 2030.
(ii) The International Financial Services Centre Authority (IFSCA), has provided for a
specialized framework to facilitate participation by SWFs in International Financial
Services Centre (IFSC), wherein such provisions which are not deemed relevant to
them have been exempted. For instance, the restriction that certain schemes should
only be close-ended was dispensed with for SWFs, and they were enabled to set-up
open-ended schemes in IFSC, paving way for setting up long term vehicles for
investments into India and other geographies. Similarly, to provide wider avenues for
investments by SWFs, the ceiling on investments in securities of unlisted companies
were also done away with for SWFs.
(d)The Government has taken several steps to boost and attract more investments
including investment from SWFs and global pension funds across the sectors. This
includes removing regulatory barriers, streamlining processes, developinginfrastructure, bettering logistics and improving the business environment by enhancing
the Ease of Doing Business (EoDB) among others.
Under, the Regulatory Compliance Burden (RCB) initiative government works with
various Ministries, Departments, and States/UTs to reduce the compliance burden on
citizens and businesses. The goal is to enhance Ease of Doing Business and Ease of
Living through four key strategies: Simplification of procedures, Rationalization of laws,
Digitization of processes, and Decriminalization of minor offences. Regulatory
Compliance (RC) Portal has been developed by Department for Promotion of Industry
and Internal Trade (DPIIT) for tracking action taken by Ministries/ Departments and
States/UTs to reduce compliance burden. Through active self-assessment initiatives,
over 45,000 compliances have been reduced. Among these, 16,028 were simplified,
22,280digitized, 4,024 decriminalized, and 2,909 redundant compliances eliminated
To enhance Ease of Living and Ease of Doing Business, the Central Government,
through the Jan Vishwas (Amendment of Provisions) Act, 2023, has decriminalized 183
provisions across 42 Central Acts administered by 19 Ministries/Departments.
Securities and Exchange Board of India(SEBI) has taken several steps to promote FPI
inflows which include enhancing ease of doing business for FPIs by simplifying the on-
boarding & registration procedure, permitting FPIs to participate in Exchange Traded
Commodity Derivatives in India, enabling participation by Non-Resident Indians (NRIs),
Overseas Citizens of India (OCIs) and Resident Indian (RI)individuals in SEBI registered
FPIs based in International Financial Services Centers in India and provision of a
framework for reclassification of FPI investment to FDI.
(e) Government has put in place an investor friendly policy, wherein most sectors except
certain strategically important sectors are open for 100% FDI under the automatic route.
More than 95% of the FDI inflow is received under the automatic route. India continues
to open up its economy to global investors, including SWFs and global pension funds,
by raising FDI limits, developing infrastructure and improving business environment. For
instance, the Union Budget 2025 announced for the further increase of FDI sectoral cap
for the insurance sector from 74% to 100%.
*******Annexure-A
Net Foreign Portfolio Investment by SWFs and pension funds in the country during the
last five financial years, sector and year-wise:
Sovereign Wealth funds investment details- Year wise and sector wise
(Figures in INR Crore)
S. Sector 2020-21 2021-22 2022-23 2023-24 2024-25
No
1 Automobile and Auto 1,562 1,823 1,033 -1,856 -5,317
Components
2 Banks 11 12 - - -
3 Capital Goods 502 1,104 1,350 3,084 3,626
4 Chemicals 414 172 463 1,127 1,337
5 Chemicals & - 24 - - -
Petrochemicals
6 Coal - - - - -
7 Commercial Services & - - - - -
Supplies
8 Construction 692 265 -127 -382 -4,963
9 Construction Materials 317 -852 1210 -1,141 808
10 Consumer Durables 277 -195 564 1,925 -2,072
11 Consumer Services -514 331 2,057 4,542 3,240
12 Diversified -38 63 98 -54 21
13 Diversified Consumer - - - - -
Services
14 Fast Moving Consumer 911 -1,519 1,219 -611 -4,118
Goods
15 Financial Services 2,688 -801 2,243 13,283 16,228
16 Food, Beverages & - - - - -
Tobacco
17 Forest Materials -22 30 17 45 45
18 General Industrials 26 - - - -
19 Healthcare -591 1,632 1,047 2,152 39
20 Healthcare Services 82 - - - -
21 Hotels, Restaurants & 326 -474 -22 - -
Tourism
22 Household & Personal - - - - -
Products
23 Information Technology -1,954 -6,233 -3,160 88 -2,845
24 Media, Entertainment & 27 361 97 -331 -98
Publication
25 Metals & Mining 107 -577 200 204 16
26 Oil & Gas -143 -750 - - -
27 Oil, Gas & Consumable 2,900 -1,057 -1,328 2,534 -3,826
Fuels28 Other Financial Services - - - - -
29 Others -2,165 -3,993 -6,042 8,406 -192
30 Pharmaceuticals & -25 13 - - -
Biotechnology
31 Power -117 -184 -408 5,876 470
32 Realty 231 330 851 380 2,321
33 Retailing - 6 295 - 103
34 Services 68 -414 1,501 785 1,253
35 Software & Services -108 -22 - - -
36 Telecommunication 2,738 -1,626 378 7,456 2,593
37 Textiles -133 10 114 52 -92
38 Textiles, Apparels & 21 13 - - -
Accessories
39 Transportation 15 52 - - -
40 Utilities -70 8 8 39 -152
Total 8,035 -12,450 3,658 47,604 8,426
Source: NSDL
Pension funds investment details- Year wise and sector wise
(Figures in INR Crore)
S.No Sector 2020-21 2021-22 2022-23 2023-24 2024-25
1 Automobile and Auto 3,401 -2,336 554 3,590 3,990
Components
2 Banks 8 - - - -
3 Capital Goods 1,497 531 2,560 3,017 5,647
4 Chemicals 1,446 845 482 179 1,675
5 Chemicals & 4 43 4 - -
Petrochemicals
6 Coal - - - - -
7 Commercial Services & - - - - -
Supplies
8 Construction 931 672 716 688 -32
9 Construction Materials 1,697 -261 -406 734 -336
10 Consumer Durables 1,882 299 -2,835 1,302 3,491
11 Consumer Services 1,152 647 2,057 1,929 -579
12 Diversified -28 -62 20 21 109
13 Diversified Consumer - - - - -
Services14 Fast Moving Consumer 3,328 1,298 1,846 2,353 434
Goods
15 Financial Services 16,627 -6,922 -5,505 310 12,626
16 Food, Beverages & - -8 - - -
Tobacco
17 Forest Materials -39 -18 157 11 141
18 General Industrials 84 5 - - -
19 Healthcare 1,990 -676 370 3,241 7,916
20 Healthcare Services 132 - - - -
21 Hotels, Restaurants & 250 -154 -13 - -
Tourism
22 Household & Personal - - - - -
Products
23 Information Technology 6,376 -5,828 -8241 6,298 1,275
24 Media, Entertainment & -19 -493 603 -565 384
Publication
25 Metals & Mining 614 3,145 356 576 3,020
26 Oil & Gas 81 18 - - -
27 Oil, Gas & Consumable 4,442 3,845 572 5718 -3,669
Fuels
28 Other Financial Services -1 - - - -
29 Others 3,660 3,955 -2,688 -2,262 29,294
30 Pharmaceuticals & 219 -281 - - -
Biotechnology
31 Power 623 2,036 2,680 3,298 -984
32 Realty 446 24 397 1379 3,332
33 Retailing - - - - 58
34 Services 756 -213 906 2,010 1,810
35 Software & Services 25 -74 - - -
36 Telecommunication 1,305 2,326 -990 887 4,514
37 Textiles 186 286 -450 76 627
38 Textiles, Apparels & 54 140 - - -
Accessories
39 Transportation 5 5 - - -
40 Utilities -8 64 -4 29 177
Total 53,125 2,855 -6,851 34,820 74,920
Source: NSDL
*****