India's asset management sector holds "vast" potential for foreign players, but pending reforms in the country's pension market currently limit scope for foreign pension managers, a report says.

"Pending reforms in the pension market, the scope for the foreign pension managers is limited at present, but on the asset management side the potential is vast," the report prepared by commercial service unit of the US Department of Commerce stated.

The report stated that the Indian financial sector may have come a long way but things are just getting started.

"The next 10 years will see more changes than the past 25 years. The buoyant economy is estimated to lead to a four-fold increase in India's investable wealth, from USD 250 billion in 2007 to USD one trillion by 2012," the report added.

About India's financial asset management industry, the report stated it is expected to grow from the current USD 83 billion to USD 520 billion by 2012, it added.

"More than 20 foreign asset management companies are considering entry into the Indian fund market," it stated. The asset management industry is expected to see a compound annual growth rate of over 20 per cent in the 2007-13 period.

The Indian pension market is expected to grow to about USD 84 billion by 2025, though small at present, it said.