India Eases FDI Rules from Bordering Nations

India's government approved changes on Tuesday to ease foreign direct investment restrictions from neighboring countries, including China, in a move aimed at boosting manufacturing and supply chain resilience while preserving national security safeguards.

The Union Cabinet, chaired by Prime Minister Narendra Modi, amended the 2020 Press Note 3 policy during a meeting in New Delhi. The revisions introduce a 60-day processing timeline for investment proposals from land-bordering countries—China, Bangladesh, Pakistan, Bhutan, Nepal, Myanmar, and Afghanistan—in key sectors such as electronics, capital goods, electronic components, polysilicon, and ingot-wafer manufacturing for solar cells. These areas were selected to promote domestic value addition and integration into global supply chains. Additionally, investments where beneficial ownership from these countries constitutes up to 10 percent and remains non-controlling will qualify for the automatic approval route, subject to sectoral limits and reporting to the Department for Promotion of Industry and Internal Trade. A formal definition of beneficial ownership, aligned with anti-money laundering rules, has been incorporated to...