India Reopens the Door to Chinese Investment After 6 Years | Vantage with Palki Sharma
After nearly six years of restrictions, India is cautiously reopening the door to Chinese investments.New Delhi has announced changes to its foreign direct investment rules — specifically Press Note 3, the regulation introduced in 2020 after the Galwan Valley clash between Indian and Chinese troops. That policy forced investments from neighbouring countries, including China, to undergo strict government scrutiny.
Now, the government is easing parts of those rules.
Under the new framework, small non-controlling investments — capped at 10% ownership — can enter through the automatic route, meaning they no longer require prior government approval. At the same time, authorities have tightened definitions around beneficial ownership to prevent Chinese investors from routing money through third countries.
The reforms also introduce a 60-day approval deadline for select sectors such as capital goods and electronic components, speeding up investment decisions.
India is not fully reversing its policy. But it is recalibrating its approach — allowing limited Chinese capital while maintaining strict oversight.
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