South Korean pension fund seeks India government bond investment licence

South Korea's state-run pension fund, the National Pension Service, is seeking permission to invest in Indian government securities under a less stringent route offered by the market regulator. This move comes as India aims to attract more foreign capital into government bonds through easier registration, lower taxes, and by targeting inclusion in global bond indices.

The National Pension Service, with assets exceeding $1.3 trillion, plans to be one of the first to apply for this lower compliance window, which allows foreign pension and sovereign wealth funds to invest only in government bonds. The new route requires low-risk investors such as sovereign wealth funds and pension funds to submit documentation only every ten years, compared to the previous three-year requirement.

Additionally, these funds do not need to disclose end-investor details as required for equity and corporate bond investors. Foreign investors have already invested $14 billion in Indian government bonds over the past year, with yields on benchmark 10-year sovereign bonds at around 7 percent, which is more favorable compared to many developed-market government securities.