DPIIT Eases FDI Norms for Companies with Chinese Stake

The Department for Promotion of Industry and Internal Trade (DPIIT) has announced key amendments to the FDI policy. These changes permit overseas companies with up to 10% Chinese shareholding to invest automatically in India, subject to sector-specific FDI limits and conditions.

These relaxed norms do not extend to entities registered in China, Hong Kong, or other nations sharing land borders with India, a move intended to streamline beneficial ownership regulations. According to the amended policy, only entities with a controlling ownership above 10% held by nationals of neighboring countries will require government approval.

This decision follows a review by the Union Cabinet to enhance investment flows, which were hindered by previous pandemic-era policies targeting ownership by countries sharing land borders with India. The updated rules aim to attract investments while maintaining regulatory safeguards.