FDI easing for foreign cos with up to 10% Chinese stake to be notified soon under FEMA

The net FDI into the country has increased to $6.26 billion during April-February 2025-26 against $959 million in the full fiscal year of 2024-25.

New Delhi: The decision to ease foreign direct investment norms for overseas companies with up to 10 per cent stake owned by Chinese entities will be notified soon under the FEMA law, a senior government official said on Thursday.

After that, the changes will come into effect.

In March, the Union Cabinet approved amendments in the press note (PN) 3 of 2020 under which foreign companies having a Chinese shareholding of up to 10 per cent will be eligible to invest in India under the automatic route across sectors.

However, the relaxed FDI rules will not apply to entities registered in China/Hong Kong or other countries sharing land borders with India.

The government has also decided that FDI proposals in specified sectors/activities of manufacturing in capital goods, electronic capital goods, electronic components, polysilicon and ingot-wafer or any other sector/activity added by the committee of secretaries headed by the Cabinet Secretary will be processed within 60 days.

Though the Department for Promotion of Industry and Internal Trade (DPIIT) has notified these changes, the Department of Economic Affairs (DEA) has not yet notified them.

"The DEA will have to issue the notification under FEMA (Foreign Exchange Management Act). It will be notified very soon. It requires a lot of fine-tuning," DPIIT Joint Secretary Jai Prakash Shivahare told reporters here.

He added that the department is working to identify sub-sectors whose applications will be processed within 60 days.

Shivahare also informed that total FDI, which includes reinvested earnings, has touched USD 88.29 billion during April-February 2025-26. It was USD 80.61 billion in 2024-25.

The net FDI into the country has increased to USD 6.26 billion during April-February 2025-26 against USD 959 million in the full fiscal year of 2024-25.

Meanwhile, addressing the media, DPIIT Secretary Amardeep Singh Bhatia said the total foreign direct investment (FDI) is likely to reach USD 90 billion in the full 2025-26 fiscal.

He said that reform measures, free trade agreements and fast-growing economic growth are helping the country to attract healthy investments.

The department also informed that Invest India, the national investment Promotion and facilitation agency, has facilitated the grounding of 60 projects worth over USD 6.1 billion during 2025–26.

These investments span 14 states and are estimated to generate more than 31,000 potential jobs.

About 42 per cent of the total grounded investment value originates from European nations.

Continued participation from the United States, Japan, South Korea, Australia, and other key source markets affirms broad-based international confidence in India's regulatory environment and manufacturing capabilities.

Emerging source nations such as Brazil, New Zealand, and Canada indicate diversification in the country's investment base.

"India's investment momentum is a direct outcome of policy clarity, institutional commitment, and the trust global investors place in our systems," Bhatia said.

Invest India MD and CEO Nivruti Rai said chemicals, pharmaceuticals, biotechnology, and food processing sectors account for about 65 per cent of grounded investments, driven by high-value projects.

The agency, she said, key emerging sectors such as electronics system design and manufacturing, aerospace and defence, and auto/EV have recorded significant activity.

She added that the agency is focusing on 11 countries for attracting greater inflows.