The Cabinet on Tuesday eased norms for foreign direct investment from all countries, including China, that share land borders with India, sources told NDTV Profit.
People in the know told profit that the press note three of 2020 has been amended in this regard. The decision was taken in a meeting of the Union Cabinet chaired by Prime Minister Narendra Modi.
Countries that share land borders with India are China, Bangladesh, Pakistan, Bhutan, Nepal, Myanmar, and Afghanistan.
Under this press note, foreign companies having shareholders from these countries required mandatory government approval for investments in India in any sector. However, after the revision small-ticket investments from these countries including China may get automatic approval.
According to people in the know, thwe move is aimed at reducing compliance burden and speeding up investment approvals. In addition they added that the government is to define threshold based on stake size or investment value.
China stands at the 23rd position with only 0.32% share ($2.51 billion) in the total FDI equity inflow reported in India from April 2000 to December 2025.
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Ties between the two countries nosedived significantly following the fierce clash in Galwan Valley in June 2020 that marked the most serious military conflict between the two sides in decades.
Following these tensions, India banned over 200 Chinese mobile apps like TikTok, WeChat, and Alibaba's UC browser.
Though India has received minimal FDI from China, bilateral trade between the two nations has grown multi-fold.
China has emerged the second-largest trading partner of India.
In 2024-25, India's exports to China contracted 14.5% to $14.25 billion as against $16.66 billion in 2023-24. Imports, however, rose 11.52% in 2024-25 to $113.45 billion against $101.73 billion in 2023-24. The trade deficit was widened to $99.2 billion in 2024-25 from $85 billion in 2023-24.
During April-January 2025-26, India's exports to China rose 38.37% to $15.88 billion, while imports rose 13.82% to $108.18 billion. Trade deficit stood at $92.3 billion.
(With Inputs From PTI)
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