Overview
- New Delhi is reviewing Press Note 3 and considering automatic approval for small investments below a defined threshold, with a final decision pending.
- Press Note 3, introduced in April 2020, requires prior approval for FDI from countries sharing a land border with India, a framework widely understood to cover Chinese-origin capital.
- Officials say the rule will remain in force as security vetting by the home and external affairs ministries continues, with adverse findings such as links to the CCP or PLA delaying approvals.
- Industry groups, especially in electronics, have urged calibrated relief, including proposals to allow joint ventures with Chinese firms capped at 26% equity.
- Reports indicate some Indian companies have advanced commercial arrangements with Chinese partners despite pending approvals, and the government has been facilitating business visas for foreign specialists to support manufacturing.