The recent decision to liberalise FDI norms for countries sharing a land border (LBCs) with India, including China, is awaiting a final green light as the Finance Ministry is yet to notify the formal changes under Foreign Exchange Management Act (FEMA) law.
While the Cabinet cleared the DPIIT proposal to ease beneficial ownership rules on March 10, internal consultations are still on at the Department of Economic Affairs and the final FEMA notification is expected soon, a DPIIT official said.
“The DEA will have to issue the notification under FEMA. It will be notified very soon. It requires a lot of fine-tuning,” DPIIT Joint Secretary Jai Prakash Shivahare told reporters on Thursday. The Press Note amendments in FDI norms become enforceable law only after they are formally incorporated into the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019.
Press Note
Per the amendments in press note (PN) 3 of 2020 approved by the Union Cabinet in March, entities in non-LBCs with up to 10 per cent beneficial owners from LBCs, including China, will be eligible to invest in India under the automatic route across sectors. The relaxed FDI rules will not apply to entities registered in China/Hong Kong or other LBCs, the government had earlier clarified.
The DPIIT is also working to identify sub-sectors to benefit from the expedited 60-day processing timeline for specific FDI proposals from LBCs, the official added. The broad sectors for which the expedited timeline has been approved include capital goods, electronic capital goods, electronic components, polysilicon and ingot-wafer,
FDI inflow up
Total inflow of FDI, which includes reinvested earnings, has touched $88.29 billion during April-February 2025-26, compared to $80.61 billion in 2024-25, Shivahare said.
The net FDI into the country has increased to $6.26 billion during April-February 2025-26 against $959 million in fiscal year 2024-25.
DPIIT Secretary Amardeep Singh Bhatia said total FDI in FY26 is likely to reach $90 billion propelled by reform measures, free trade agreements and fast-growing economic growth.
Efforts by Invest India, the government’s investment promotion and facilitation agency, has helped facilitate the grounding of 60 projects worth over $6.1 billion during 2025–26, the DPIIT stated.
“These investments span 14 States and are estimated to generate more than 31,000 potential jobs, reflecting sustained and deepening global confidence in India as a preferred investment destination.” per an official statement.
About 42 per cent of the total grounded investment value originates from European nations.
Continued participation from the US, Japan, South Korea, Australia, and other key source markets affirms broad-based international confidence in India’s regulatory environment and manufacturing capabilities, the statement highlighted. Emerging source nations such as Brazil, New Zealand and Canada indicate diversification in the country’s investment base.
Invest India MD and CEO Nivruti Rai said chemicals, pharmaceuticals, biotechnology and food processing sectors account for about 65 per cent of grounded investments, driven by high-value projects.
Key emerging sectors such as electronics system design and manufacturing, aerospace and defence, and auto/EV have recorded significant activity, she said.
Published on April 30, 2026