Chinese Fdi

• India approved only one Chinese Foreign Direct Investment (FDI) proposal worth ₹1 crore and 13 proposals from Hong Kong totaling ₹610.42 crore during the last financial year. • These investments require prior government clearance under Press Note 3 of the DPIIT, a regulation implemented in April 2020 for countries sharing a land border with India. • The restrictive policy was established to prevent opportunistic takeovers and acquisitions of Indian firms during the COVID-19 pandemic.

• India has loosened investment rules to encourage Chinese Foreign Direct Investment (FDI), signaling a potential thaw in bilateral relations. • Experts like Ivan Lidarev of the National University of Singapore argue the move is insufficient, citing continued ambiguity and severe limits on Chinese ownership. • The shift is driven by India's need for Chinese technology and capital to achieve industrial growth goals, particularly within the electric vehicle sector.

• India's government approved amendments allowing overseas companies with Chinese or Hong Kong shareholding of up to 10% to invest in India under the automatic route, with notification expected soon under the Foreign Exchange Management Act. • The decision was communicated by the government on Thursday and will come into effect following official notification, marking a significant shift in India's foreign direct investment policy toward greater openness. • This policy change, approved in March 2026 through amendments to Press Note 3 of 2020, aims to attract increased Chinese investment while maintaining regulatory oversight of strategic sectors.