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India Relaxes FDI Rules, Potentially Paving Way for Higher Chinese Investment

  • On Tuesday, the government eased foreign direct investment rules for countries sharing land borders with India, including China, in a move approved by the Union Cabinet chaired by Prime Minister Narendra Modi.
  • China accounts for only 0.32 in India’s total FDI from April 2000 to December 2025, while imports rose 11.52% to USD 113.45 billion, widening the trade deficit to USD 99.2 billion in 2024-25.
  • Amending Press Note-3 of 2020, officials altered approval requirements for foreign companies with shareholders from countries sharing a land border, replacing the prior mandatory government approval requirement.
  • The amendment could open the door to increased investment from neighbouring countries, including China, as China is one of India’s largest trading partners, despite minimal FDI from China.
  • Despite earlier bans on over 200 Chinese apps, New Delhi has eased FDI rules for border-sharing countries, though relations soured after the Galwan Valley clash in June 2020.
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Devdiscourse broke the news in India on Tuesday, March 10, 2026.
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