South Korea's National Pension Service eyes licence for Indian government bond investments

South Korea’s state-run National Pension Service, which manages over $1.3 trillion, is seeking registration to buy Indian government securities through a compliance-light pathway introduced by the Securities and Exchange Board of India. The programme, aimed at drawing stable foreign capital, reduces reporting frequency to once every ten years and removes the need to reveal end-investor identities, a benefit for sovereign-wealth and pension funds.

India has been lowering taxes and simplifying registration to boost bond purchases after equity inflows dropped by about $45 billion between 2025 and 2026. Foreign investors have already placed $14 billion in Indian bonds this year, with yields on 10-year sovereigns near 7 percent. Should the licence be granted, NPS would become one of the first major global pension funds to operate a bond-only vehicle in India, separate from its existing equity-focused offshore funds.

Data show foreign holdings of Indian government debt total roughly 4 trillion rupees, while pension-fund holdings amount to about 469 billion rupees. The move reflects India’s broader strategy to diversify funding sources and attract long-term capital.