India is planning to ease foreign direct investment (FDI) rules for overseas companies that have a small exposure to Chinese firms, in a move aimed at attracting more global investments.
Under the proposed change, foreign companies with up to 10% stake from Chinese entities may face fewer restrictions when investing in India. The final notification is expected soon from the Department of Economic Affairs.
The move comes as India looks to speed up approvals and make it easier for global businesses to invest, especially in key sectors. Current rules, introduced in 2020, require stricter scrutiny of investments linked to countries sharing land borders with India, including China.
Officials say the new approach will help remove delays for companies where Chinese ownership is minimal, without compromising on security concerns.
At the same time, investments with higher Chinese stakes are likely to continue facing tighter checks.
The step is seen as an effort to strike a balance, encouraging foreign investment and economic growth, while still keeping a close watch on sensitive inflows.
