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The Sovereign Wealth Funds (SWFs) and Pension Funds (PFs) have emerged as critical drivers of capital flow into India says a report named "The Role of Sovereign Wealth and Pension Funds in India's Growth".
The report noted that these funds have been key drivers of capital inflow into the country, significantly contributing to sectors such as infrastructure, real estate, healthcare, and renewable energy. According to the report, as of November 2024, SWFs had invested approximately USD 626 million directly in India, reflecting their increasing interest in the market. It also added that global funds such as GIC Private Limited, the Public Investment Fund (PIF), and Temasek have played a major role in this investment wave. The report noted that in 2023, these funds managed assets ranging from USD 492 billion to over USD 1.5 trillion. The report said "With their long-term investment horizons, stable returns, and robust risk mitigation strategies, SWFs and PFs are not only bolstering India's economic trajectory but also enhancing the country's attractiveness to global capital". Investment in Indian securities by SWFs has also seen a sharp rise. In May 2024, it was reported that total securities holdings by SWFs in India increased by 60 per cent, rising from Rs 3 trillion in 2023 to Rs 4.7 trillion in 2024. Despite the positive trends, the report pointed out certain challenges that could impact future investments. Issues such as regulatory oversight, governance concerns, and geopolitical risks may create hurdles in ensuring smooth capital inflows. It added "Regulatory oversight, governance issues, and geopolitical uncertainties can impact the smooth flow of investments. To fully realize the potential of SWF and PF investments, continued focus on policy reforms, transparency, and a stable investment climate is essential". Looking ahead, India's rapidly growing economy and increasing interest from global institutional investors create a promising outlook. The report noted that strengthening partnerships between SWFs, PFs, and the Indian market is expected to drive economic development and sustainable investment returns. With the right strategies, India is well on its way to becoming a leading global hub for SWF and PF investments, contributing to long-term economic growth and prosperity. (ANI)
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