There are growing demands, in many quarters of India, to start its own Sovereign Wealth Fund (SWF). As per the latest news reports, many local state-owned oil companies are asking Delhi to create one.

No wonder then that the Center is taking these demands seriously and is mulling over to start its own fund.

This is important since Indian oil companies are facing serious opposition when it comes to overseas acquisitions. Chinese companies, who are backed by their $283.5 billion SWF, find it easier to bid and even easier to win those bids.

These could prove to be a serious threat to India's oil security.

Starting one SWF is also important since India is the only nation amongst the BRIC countries which does not have one.

Russia has National Welfare Fund with $168 billion as the corpus; Brazil has Sovereign Fund of Brazil. China, on the other hand has two SWFs. These include SAFE Investment Company and China Investment Corporation.

While some countries, like Brazil use their SWF to cushion them against any kind of financial and/or economic crisis; there are others like China who use it for other purposes.