Govt eases investment norms for neighbouring countries including China:Overseas firms with 10% investment from such countries can now invest without Centre’s approval

The Central Government has relaxed the Foreign Direct Investment (FDI) rules for neighbouring countries that share borders with India, including China. In the cabinet meeting held on Tuesday, March 10, 2026, under the chairmanship of PM Modi, changes to Press Note 3, i.e. FDI policy rules, were approved. Under the new rules, investment proposals where the neighboring country’s investor has less than 10% stake and no control over the company will now get automatic approval. Additionally, a 60-day time limit has been set for investments in the strategic manufacturing sector. In fact, when a foreign company or individual directly invests money in a company, factory, business or project in India, it is called FDI. Startups and Deep Tech Companies Will Benefit The government’s decision will have the biggest impact on Indian startups and the deep tech sector. The government says that these changes aim to attract investment from global funds and promote ‘Ease of Doing Business’. Until now, due to Press Note 3, many global Private Equity (PE) and Venture Capital (VC) funds were facing difficulties in investing because they included small stakes from investors of neighboring countries. Now with the 10% limit set, fund flow will become easier. Definition of ‘Beneficial Owner’ Clarified Decision on investment within 60 days, easier to form joint ventures The Cabinet has also approved a ‘fast track’ approval system for the manufacturing sector. Now the government will have to make decisions on investment proposals in special manufacturing sectors within 60 days. This will help Indian companies form technology partnerships and joint ventures with foreign companies. The government believes this will make it easier for India to become part of the global supply chain. Electronics and solar sector will benefit the most The government has clarified that these changes will especially benefit three sectors the most… No compromise with security, Indian control necessary Despite relaxation in rules, the government has maintained security. Fast-track approval in sensitive sectors will only be granted when the majority shareholding and control remains with Indian citizens or Indian companies. It has been ensured that no investment poses a threat to national security and the company’s command remains in Indian hands.