Saturday Mar 14, 2026
Saturday Mar 14, 2026
Saturday, 14 March 2026 00:00 - - {{hitsCtrl.values.hits}}
Indian Prime Minister Narendra Modi (left) with Chinese President Xi Jinping
India has approved changes to its foreign direct investment (FDI) framework that will allow investments from countries sharing land borders with India in selected manufacturing sectors, including electronic components, capital goods and solar cells.
The changes, approved by the Indian cabinet, are expected to ease restrictions that had effectively limited Chinese investment since tighter controls were introduced in 2020.
Under the revised rules, investments from these neighbouring countries will be processed through an expedited approval process, with applications expected to be reviewed within 60 days, provided Indian shareholders retain ownership control of the companies.
The policy also allows companies from land-bordering countries to acquire up to a 10% stake in Indian businesses without requiring prior government approval.
The move is aimed primarily at enabling participation in manufacturing supply chains while maintaining safeguards over strategic control of domestic firms.
The revised framework is intended to facilitate investment flows into manufacturing segments that support industrial production, particularly in sectors linked to electronics, machinery and renewable energy components.
The Indian Government also noted that earlier restrictions had slowed investment flows from global investors in cases where funds held minority or non-controlling stakes through structures that included investors from neighbouring countries.
By allowing limited participation and faster approvals, the revised policy is expected to improve investment access for manufacturing projects while keeping regulatory oversight in place.
The changes also align with efforts to strengthen India’s role in global supply chains, particularly in sectors where companies seek to diversify production bases while maintaining access to regional manufacturing ecosystems.
