India Approves Only One Chinese FDI Proposal in FY26 Despite Policy Easing

India approved only one foreign direct investment (FDI) proposal from China worth ₹1 crore during FY2025-26, underscoring the government's cautious approach towards investments from countries sharing a land border with India despite a partial relaxation of FDI norms earlier this year.

According to Department for Promotion of Industry and Internal Trade (DPIIT) data, the government also approved 13 proposals from Hong Kong worth ₹610.42 crore. Overall, 63 FDI proposals worth ₹10,292.67 crore (USD 1.18 billion) received approval between April 2025 and March 2026.

Among approved investments, Singapore emerged as the largest source by value with ₹3,259.88 crore across five proposals, followed by the United Kingdom with ₹2,477.67 crore and Thailand with ₹1,600 crore.

The approvals continue to be governed by Press Note 3, introduced in April 2020 to prevent opportunistic takeovers during the COVID-19 pandemic. The policy requires prior government approval for investments from entities based in countries sharing a land border with India, including China, Pakistan, Bangladesh, Nepal, Bhutan, Myanmar, and Afghanistan.

In March 2026, the government eased the policy by allowing investments with non-controlling beneficial ownership of up to 10 per cent from land-border countries through the automatic route, subject to sectoral conditions. However, the relaxation does not apply to entities registered in China, Hong Kong, or other land-border countries, meaning direct investments from these jurisdictions continue to require government clearance.

The figures highlight China's limited role in India's FDI landscape. Between April 2000 and March 2026, China accounted for USD 2.51 billion (0.32%) of total FDI equity inflows, while Hong Kong contributed USD 4.91 billion (0.62%).

The trend mirrors FY2024-25, when India approved just one Chinese proposal worth ₹28.71 crore. The latest data reflects India's continued balancing of foreign investment inflows with economic security and strategic considerations.