India Eases FDI Norms for Land-Bordering Countries

India's Union Cabinet approved amendments on March 10, 2026, easing foreign direct investment norms for entities from countries sharing land borders with the nation, including China, Pakistan, Nepal, Bangladesh, Bhutan, Myanmar, and Afghanistan. The changes, which relax restrictions imposed in 2020, aim to attract more capital inflows while maintaining safeguards for national security and majority Indian control in investee companies.

The revisions modify Press Note 3, a policy introduced in April 2020 amid the COVID-19 pandemic and heightened border tensions with China following the Galwan Valley clash. That earlier measure required prior government approval for all investments from land-bordering countries to prevent opportunistic takeovers. Under the new guidelines, investors with beneficial ownership of up to 10 percent from these countries can now proceed via the automatic route, provided they do not exercise management control or hold board seats. Such investments must be reported to the Department for Promotion of Industry and Internal Trade.

For specified sectors, including the manufacturing of capital goods, electronic components, solar cells, polysilicon, ingot wafers,...