National Capital
Wed, Mar 11, 2026, 13:10
India Eases FDI Rules for Countries Sharing Land Borders, Including China
09:47
India's government has simplified foreign direct investment (FDI) norms for countries sharing a land border with it, including China—a key trading partner. Sources reported this. Specifically, Press Note 3 of 2020 was amended; it previously required mandatory government approval for investments from companies with shareholders from these countries in any sector.
The decision was made at a Union Cabinet meeting chaired by Prime Minister Narendra Modi. Countries sharing a land border with India include China, Bangladesh, Pakistan, Bhutan, Nepal, Myanmar, and Afghanistan.
Key FDI and Trade Facts
- China's share in India's total FDI equity inflows from April 2000 to December 2025 is just 0.32% (USD 2.51 billion), ranking it 23rd.
- Relations between the two countries deteriorated sharply after the fierce clash in the Galwan Valley in June 2020—the most serious military incident in decades. In response, India banned over 200 Chinese mobile apps, including TikTok, WeChat, and Alibaba's UC Browser.
- Despite low FDI levels, bilateral trade is growing: China is India's second-largest trading partner.
Trade Balance
| Period | India's Exports to China (bn USD) | Imports from China (bn USD) | Deficit (bn USD) |
|---|---|---|---|
| 2023-24 | 16.66 | 101.73 | 85 |
| 2024-25 | 14.25 (-14.5%) | 113.45 (+11.52%) | 99.2 |
| Apr-Jan 2025-26 | 15.88 (+38.37%) | 108.18 (+13.82%) | 92.3 |
These changes aim to facilitate investment inflows and boost the economy.
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