Amid growing tensions between India and China, the finance ministry has proposed putting restrictions on pension fund investments 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 under the automatic route.
According to a draft notification circulated for comments on Friday, “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 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. 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.
Twenty Indian Army personnel, including a colonel, were killed in a clash with Chinese troops in the Galwan Valley on Monday night, the biggest military confrontation between the two sides in over five decades. The situation has stirred anti-China sentiments in the country, with protestors and traders bodies calling for boycott of Chinese products.