Chennai/New Delhi, April 27 (IANS): Even as the Indian government on Monday notified the raised limit of foreign direct investment (FDI) in the pension sector to 49 percent, experts said that there may not be a rush of new players into this sector in the short term.

The department of industrial policy and promotion under the commerce and industry notified the increase in FDI limits in line with the FDI cap raised recently in the insurance sector from the existing 26 percent.

As per the Pension Fund Regulatory and Development Authority (PFRDA) Act, the FDI limit is linked to the limits set for the insurance sector under the Insurance Regulatory and Development Authority Act, 2013.

"The move is expected to bring in more players. This in turn would grow the overall pension market benefiting all," S. Bandyopadhyay, MD and CEO of LIC Pension Fund Ltd, told IANS over phone on Monday.

However industry officials said the impact of the government move will not be immediate as it will take some time for the foreign players to come into this domain.

According to an industry official, the Indian pension sector is currently around Rs.80,000 crore and bulk of it is managed by three players -- LIC, SBI Pension Funds and UTI.

More than 90 percent of the business is from the government.

Including the private parties, there are seven players in the domestic pension sector licensed by PFRDA as the pension fund manager for the corpus under National Pension System (NPS).

The extra tax benefit for NPS subscription is expected to bring in additional business for the players, officials say.

Similarly allowing the employees to choose between Employees Provident Fund (EPF) and the NPS is expected to bring in more business for the pension players.

The FDI limit is in the forms of FPI, FII, QFI, FVCI, NRI and DR.

No government approval is required till 26 percent, but the Foreign Investment Promotion Board (FIPB) approval would be needed for investment beyond 26 percent and up to the cap of 49 percent.

All investments in the pension sector, however, will have to abide by the pension sector regulator, the Pension Fund Regulatory and Development Authority (PFRDA).