New Delhi: As many as 29 FDI proposals totalling about Rs 4,895.65 crore (over USD 500 million) have been reported so far following the government’s decision in May to permit overseas companies with up to 10 per cent Chinese shareholding to invest in India under the automatic route, an official statement said on Friday.
Before May, these companies, even with a minor stake held by an individual or firm from a country sharing land border with India, were required to seek government approval to invest in any sector in India.
Following the demand from the stakeholders, the government amended the norms. As per the amendments, foreign companies having a Chinese/Hong Kong shareholding of up to 10 per cent are eligible to invest in India in sectors where FDI is permitted under the automatic route, subject to sectoral conditions.
However, these relaxed FDI rules do not apply to entities registered in China or Hong Kong or other countries sharing land borders with India.
Countries that share land border with India are China, Pakistan, Bangladesh, Nepal, Bhutan, Myanmar, and Afghanistan.
The finance ministry notified the changes to this effect under FEMA on May 1, 2026.
“A total of 29 FDI investments have been reported under the revised framework up to 20 August, 2026, involving proposed FDI of Rs 4,895.65 crore,” the commerce and industry ministry said.
It said these investments span a range of sectors, with significant investments in information technology, artificial intelligence, information and communication, manufacturing, pharmaceuticals, data centres and transport services, among others.
The 29 investments have been reported from investors/entities based in jurisdictions, including Mauritius, the United States, Korea, Japan, Singapore, Luxembourg and the Cayman Islands.
The revised framework notified in May significantly facilitates and expedites the flow of foreign investment into India by removing the requirement of prior government approval in such cases, the ministry said.
The investor entity can proceed through the automatic route, subject to compliance with applicable reporting requirements. The reform provides greater certainty to investors, reduces transaction time and further strengthens the ease of doing business in India.
The revised framework facilitates and expedites the flow of foreign investment into India by removing the requirement of prior government approval in cases involving non-controlling land bordering countries ownership of up to 10 per cent.
The reform provides greater certainty to investors, reduces transaction time and further strengthens the ease of doing business in India.
“With Press Note 2 of 2026 and the consequent amendment to the Foreign Exchange Management (Non-debt Instruments) Rules, 2019, notified on 1 May 2026, the beneficial ownership test is now applied at the level of the investor entity,” it said. The investor entity can proceed with the investment without obtaining any other approval, after reporting the relevant information to the government.
