Govt sets 60-day deadline for select FDI proposals from border nations
New Delhi, Mar 11, 2026
Select FDI proposals from land-border countries in sectors such as batteries, rare earths and electronics will be processed within 60 days under revised Press Note 3 rules
Proposals for investments from China and other land-border countries will include advanced battery components, rare earth permanent magnets, rare earth processing sectors and such applications will be processed and decided within 60 days under the latest foreign direct investment (FDI) policy guidelines approved by the Union Cabinet.
Department for Promotion of Industry and Internal Trade (DPIIT) Secretary Amardeep Singh Bhatia on Wednesday told reporters that this list can be further expanded or reduced by a committee of secretaries (CoS) headed by the Cabinet Secretary. The list also includes capital goods, electronic capital goods, electronic components, polysilicon, and ingot-wafer.
Bhatia, however, clarified that despite the expedited mechanism being laid out by the government and a definitive 60-day timeline for processing investment proposals, the security and political clearance will not be eased.
“It's a changing world and the opening up doesn’t mean that concerns with regards to security have gone away,” he said.
On Tuesday, the Union Cabinet adopted a calibrated approach to easing restrictions on investments from countries sharing land borders with India, including China. It made two amendments — allowing investments through the automatic route for non-controlling stakes below 10 per cent and introducing a definitive timeline for processing investment proposals in select sectors to boost domestic manufacturing.
Overseas companies having Chinese shareholding of up to 10 per cent will be eligible to invest in India under the automatic route across sectors. Earlier, foreign firms with shareholders from these land-border nations owning even a single share had to seek mandatory approval to invest in India in any sector. Large global firms such as BlackRock and Carlyle were seeking the easing of the Press Note.
However, entities registered in China and Hong Kong and countries sharing land borders with India will continue to require prior government approval if they want to invest in India.
“All the restrictions for investors from land-border countries (LBCs) are still applicable. There is no relaxation so far as entities or investors in LBCs are concerned. This relaxation is only for entities in non-LBCs and having beneficial owners from LBCs below 10 per cent and non-controlling stake... there are no relaxations as far as investments from LBCs are concerned,” DPIIT Joint Secretary Jai Prakash Shivahare said.
Shivahare further said that if a firm from a country sharing a land border with India provides technology and holds even 1 per cent stake, through which it may exercise some form of control, the investment will still require approval through the government route.
Known as Press Note 3, India’s position was revised in April 2020 to curb opportunistic takeovers or acquisitions of domestic firms considering their financial stress during the Covid-19 pandemic. The move, however, was mainly aimed at restricting investments from China amid tensions at the border. Before April 17, 2020, investments from China could proceed without prior government approval under the automatic route.
At present, about 600 applications are under the Press Note 3 framework.
The amendments will come into effect after DPIIT and the Ministry of Finance notify them.
[The Business Standard]
