The government's recent changes to the Press Note 3 (PN3) framework governing foreign direct investment (FDI) from countries sharing land borders with India are largely clarificatory in nature and aimed at making investment approvals more efficient, according to Ministry of Electronics and IT (MeitY) Secretary S Krishnan.
Speaking exclusively to NDTV Profit, Krishnan said the revised norms are designed to provide a quicker and more time-bound mechanism for investment clearances, particularly for sectors such as electronics and capital goods manufacturing.
“We see this as more of a clarificatory move,” he said, adding that investments under PN3 are typically tied to specific projects and direct manufacturing activity.
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The Union Cabinet recently amended the framework to allow up to 10% non-controlling stake investments from land-bordering countries under the automatic route, without prior government approval. Earlier, investments from countries sharing land borders with India — including China, Bangladesh, Pakistan, Nepal, Bhutan, Myanmar and Afghanistan — required mandatory government clearance under the PN3 policy introduced in 2020.
Krishnan said the revised norms should help improve the investment climate in sectors where India is keen to expand manufacturing capacity. “India must have a strong presence in electronic manufacturing,” he said.
Semiconductor Push Under ISM 2.0
The government is also working on the next phase of its semiconductor strategy under the India Semiconductor Mission (ISM) 2.0, which is expected to be larger in scale than the first phase. Krishnan said while ISM 1.0 focused on four components, the next phase will place greater emphasis on advanced semiconductor packaging. The government is also looking to address gaps that have emerged in areas such as chemicals and materials used in chip manufacturing, he added.
The Design Linked Incentive (DLI) scheme introduced under ISM 1.0 has been “fairly successful,” Krishnan said, though the government is now examining ways to address industry concerns and create clearer pathways for research and development in the semiconductor ecosystem.
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Social Media Rules and AI Guidelines
On the policy front, the government is also examining proposals for age-based restrictions on social media platforms. Krishnan said authorities are currently gathering suggestions and reviewing concerns around the issue. “There is definitely a concern,” he said. “We will study the suggestions, and if there is a consensus, we will act on it.”
He also addressed proposed AI labelling guidelines, which may require technology platforms to respond quickly to flagged content. According to Krishnan, the proposed three-hour response window should be manageable for large technology companies given their advanced digital capabilities.
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