India FDI norms eased for China and land-border nations, with proposed 60-day approvals

Experts said India’s decision to relax FDI rules for China and other land-bordering nations aimed to draw funds. The change also kept checks to protect sensitive interests. They added that the updated framework supported supply-chain links. It also helped access newer technologies when foreign investment had slowed recently.

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A key change was a proposed 60-day fast-track clearance for some investments. Analysts said the timeline could add certainty for investors. They also viewed it as a middle path. It could attract capital while keeping strategic safeguards in place.

FDI norms for China: 60-day approvals and ownership checks

Neha Aggarwal, Partner, Deloitte India, said clearer beneficial ownership rules improved predictability. Aggarwal said this clarity had been awaited in India’s FDI system. Aggarwal added that a 60-day approval window balanced inflows and security. Aggarwal also linked it to supply-chain integration and advanced technology access.

Shardul S Shroff, Executive Chairman, Shardul Amarchand Mangaldas & Co, welcomed the faster route. Shroff said it covered selected areas like manufacturing and electronics components. Shroff added that it applied only if domestic entities kept majority ownership and control. Shroff said the strict condition could limit how widely it gets used.

FDI norms for China: 10% exemption under Press Note 3

Rudra Kumar Pandey, Partner at Shardul Amarchand Mangaldas & Co, focused on minority deals. Pandey said allowing up to 10 per cent investment without prior approval set a practical limit. Pandey said the exemption applied only when land-bordering persons did not control the investor. Pandey added this allowed smoother minority stakes while protecting control ownership.

Rahul Turki, Partner and Global Value Chain Ecosystem Leader, Grant Thornton Bharat, said the update lowered friction. Turki said it helped global private equity and venture capital funds with small exposure. Turki said it could unlock capital for startups and deep-tech. Turki also pointed to electronics components and solar supply chains as beneficiaries.

FDI norms for China: impact on manufacturing and trade

Think tank GTRI said eased limits opened space for cross-border investment. GTRI said India’s manufacturing outcome would still depend on wider economic conditions. It said the shift should be seen as a chance for stronger manufacturing inflows over time. GTRI Founder Ajay Srivastava said India must cut manufacturing costs to improve competitiveness.

Krishan Arora, Partner and Leader, Indirect Tax and India Investment Advisory, Grant Thornton Bharat, said trade could rise. Arora said the revised FDI guidelines could lift flows with neighbours. Arora named China and Bangladesh among land-bordering countries. Arora said the intent was easier business, stronger electronics and solar output, and higher inbound investment.

Overall, experts said the relaxed FDI approach mixed openness with safeguards. The fast-track route and ownership conditions aimed to reduce uncertainty. The 10 per cent exemption supported smoother minority investments under Press Note 3. Analysts added that larger manufacturing gains still depended on costs and broader economic conditions.

With inputs from PTI