India gets Rs 4,896 crore FDI proposals under eased Chinese stake rules

India has received 29 foreign direct investment (FDI) proposals worth Rs 4,895.65 crore under its revised framework that allows automatic approval for investments from entities in land-bordering countries with a Chinese or Hong Kong shareholding of up to 10%. The proposals, reported by the commerce ministry as of 20 August, span sectors including information technology, artificial intelligence, manufacturing, pharmaceuticals, and data centres.

The revised rules, notified on 1 May 2026 through Press Note 2 of 2026, remove the prior government approval requirement for small, non-controlling stakes from investors based in jurisdictions such as the US, Singapore, Mauritius, and the Cayman Islands. The beneficial ownership test is now applied at the level of the investor entity. Investments in capital goods, electronic components, polysilicon and ingot-wafer sectors from land-bordering countries will still be considered case-by-case, with a decision within 60 days.

Under the earlier Press Note 3 of 2020, even a tiny beneficial ownership from a land-bordering country required government clearance, a process long criticised as cumbersome. The government said the calibrated relaxation aims to give investors greater certainty and reduce transaction time while retaining safeguards for controlling stakes.