Korea's NPS Eyes India Office to Diversify Global Investments

This article was first published on Signal, Seoul Economic Daily's capital markets newsletter, at 13:44 on March 2, 2026.

The National Pension Service (NPS) is pursuing the establishment of an overseas office in India, the world's fourth-largest economy. The move is aimed at expanding investment targets to emerging markets to achieve both risk diversification and higher returns. The strategy aligns with global pension funds that are setting up local entities in India to expand their presence.

According to investment banking sources on March 2, the NPS Fund Management Division is internally reviewing plans to establish an overseas branch in India. Sources inside and outside the NPS suggest full-scale investment activities in India could begin as early as next year. If established, the India office would become NPS's fifth global investment hub, following New York, London, Singapore, and San Francisco.

While NPS had previously considered securing an investment base in India, those plans never materialized. This time, NPS Chairman Kim Sung-joo's strong commitment to overseas investment diversification, emphasized since taking office, is driving the initiative. In his inaugural address late last year, Kim stated, "We will leave the small pond of Korea and navigate the five oceans to reach six continents."

According to NPS Fund Management Division data, a significant portion of overseas investments is concentrated in developed markets such as North America and Europe. As of the end of 2024, North America accounted for 70.5% of overseas equity holdings, while Europe represented 14%. Alternative investments in private equity, real estate, and infrastructure also showed developed market concentrations of approximately 50-60%. The India base is intended to boost returns by expanding into emerging markets.

For NPS, which typically maintains currency exposure on overseas investments, diversifying into more countries creates a natural hedging effect. Currency exposure is an investment strategy that leaves foreign exchange risk unhedged during overseas investment. Holding multiple currencies and adjusting their proportions allows for diversification benefits.

To advance these plans, NPS Chief Investment Officer Seo Won-joo will travel to India this month. Mumbai, India's financial hub, is being considered as the likely location. Seo is expected to assess the overall local financial environment and investment opportunities. Mumbai serves as India's financial and commercial center, and its high income levels make it the country's economic heart. Both of India's stock exchanges, which together handle 98% of the country's securities trading, are located in Mumbai.

Global institutional investors are also actively investing in India through local entities. Singapore's sovereign wealth fund Temasek, Malaysia's Khazanah, Singapore's GIC, and Canada Pension Plan Investment Board (CPPIB) all maintain offices in Mumbai. In 2024, Korea Investment Corporation (KIC) received approval from the Reserve Bank of India to establish a Mumbai office.

India is posting the highest growth rate among emerging markets, averaging over 7% annually. According to the Indian government, economic growth is expected to reach 7.4% for the fiscal year ending March 2026, with projections of 6.8-7.2% for the following fiscal year ending March 2027. Morgan Stanley noted that India "will continue its strong growth momentum thanks to structural reforms and robust domestic demand, even amid global economic uncertainty."

An investment banking industry source said, "NPS has recently been focusing on securing an India presence," adding that "the outline could emerge soon as they assess personnel requirements."