Finance Ministry notifies FDI easing to allow Chinese investments to enter
News
- The Finance Ministry has notified a decision to allow overseas companies with Chinese shareholding of up to 10% to invest in India under the automatic route.
- In March 2026, the Union Cabinet amended its 2020 rules that had placed restrictions on Foreign Direct Investment from countries that shared a land border with India.
- Press Note 3, issued in 2020, had specified that any entity of a country that shares a land border with India can invest in India only after securing Government approval.
- The amendment now incorporates a provision of ‘beneficial ownership’ and specifies that companies with non-controlling stake (up to 10%) belonging to entities from these countries can invest in India without first seeking Indian government approval.
- While India shares borders with China, Pakistan, Nepal, Bhutan, Bangladesh, Afghanistan and Myanmar, the restrictions were primarily aimed at limiting investments from China, following the Galwan Valley clash in June 2020.