India Speeds Up FDI Approvals from Neighbors

New Delhi, Jun 1 (PTI) The government has significantly streamlined procedures for clearing FDI applications of neighbouring countries including China, with quicker decisions, and regular inter-ministerial committee meetings to ensure approvals are processed within the set timelines, an official said.

The number of pending foreign direct investment (FDI)proposals from countries sharing land border with India under the provisions of Press Note 3 is less.

Under Press Note 3 of 2020, the government has made its prior approval mandatory for foreign investments from countries that share land border with India. These countries are China, Bangladesh, Pakistan, Bhutan, Nepal, Myanmar and Afghanistan.

As per that decision, FDI proposals from these countries need government approval for investments in India in any sector.

"The government has streamlined a lot the procedures for clearance of applications coming under Press Note 3 of 2020. The time taken to decide on these applications has also come down significantly. Meetings of the inter-ministerial committee are happening regularly to ensure that within the laid down timelines, these applicants are decided upon," the official told PTI.

Review of these meetings happens regularly at the cabinet secretary level also, the official, who did not wish to be named, said.

At present, there is an inter-ministerial committee headed by the Home Secretary to consider applications under that press note.

Industry experts have urged the government to ease Press Note 3 rules, as foreign firms with even tiny Chinese shareholding still need approval under this route.

The Economic Survey 2024-25 had made a strong case for seeking foreign direct investments (FDI) from Beijing to boost local manufacturing and tap the export market.

As the US and Europe are shifting their immediate sourcing away from China, it is more effective to have Chinese companies invest in India and then export the products to these markets rather than importing from the neighbouring country, the survey had said.

At present, the bulk of the FDI coming into India falls under the automatic approval route.

China stands at 23rd position with only 0.34 per cent share (USD 2.5 billion) in total FDI equity inflow reported in India from April 2000 to March 2025.