South Korean pension fund seeks India government bond investment licence, sources say

Seoul's National Pension Service is seeking a licence to invest in Indian government securities, according to sources familiar with the matter. The South Korean pension fund, which manages over $1.3 trillion, aims to benefit from a less stringent regulatory route offered by the Indian market regulator, SEBI. This follows India's efforts to attract more foreign capital into government bonds through simplified registration and taxation.

In recent years, foreign investment in Indian government bonds has surged, with $14 billion flowing into the market in the past year. The 10-year Indian sovereign bond yield stands at around 7%, while Treasury bills yield between 5.30% and 6%. The new lower compliance window allows foreign investors to submit documentation only every ten years, compared to the previous requirement of three years.

South Korea's pension fund is among the first large global pension funds to explore this route, making it a significant step towards diversifying its funding sources and attracting more stable capital inflows.