Govt eases FDI norms for China, other countries sharing land border with India

The government on Tuesday eased norms for foreign direct investment from all countries, including China, that share land borders with India, sources said. They said press note 3 of 2020 has been amended in this regard.
The decision was taken in a meeting of the Union Cabinet chaired by Prime Minister Narendra Modi.
However, Information and Broadcasting Minister Ashwini Vaishnaw did not make any announcements in this regard during the media briefing on cabinet decisions. The department for promotion of industry and internal trade (DPIIT) said that “no such announcement has been made by the Cabinet today”.
DPIIT is an arm of the commerce and industry ministry which deals with issues related to FDI. Under the press note 3, foreign companies having shareholders from countries sharing land borders with India are required to obtain mandatory government approval for investments in any sector.
Countries that share land borders with India are China, Bangladesh, Pakistan, Bhutan, Nepal, Myanmar, and Afghanistan.
China stands at the 23rd position with only 0.32 per cent share (USD 2.51 billion) in the total FDI equity inflow reported in India from April 2000 to December 2025.
Ties between the two countries nosedived significantly following the fierce clash in Galwan Valley in June 2020 that marked the most serious military conflict between the two sides in decades.
Following these tensions, India banned over 200 Chinese mobile apps like TikTok, WeChat, and Alibaba’s UC browser.
Though India has received minimal FDI from China, bilateral trade between the two nations has grown multi-fold.
China has emerged as the second-largest trading partner of India.
In 2024-25, India’s exports to China contracted 14.5 per cent to USD 14.25 billion as against USD 16.66 billion in 2023-24. Imports, however, rose 11.52 per cent in 2024-25 to USD 113.45 billion against USD 101.73 billion in 2023-24. The trade deficit was widened to USD 99.2 billion in 2024-25 from USD 85 billion in 2023-24.
During April-January 2025-26, India’s exports to China rose 38.37 per cent to USD 15.88 billion, while imports rose 13.82 per cent to USD 108.18 billion. The trade deficit stood at USD 92.3 billion.