Kamal Ghorui
The government is set to soon notify changes under the Foreign Exchange Management Act (FEMA) that will ease foreign direct investment (FDI) norms for overseas companies with up to 10 per cent Chinese shareholding, a senior official told news agency PTI on Thursday.Once notified by the Department of Economic Affairs (DEA), the revised framework will come into effect.The Union Cabinet had in March approved amendments to Press Note 3 of 2020, allowing foreign companies with Chinese ownership of up to 10 per cent to invest in India through the automatic route across sectors.However, the relaxation will not apply to entities registered in China, Hong Kong or any other country sharing a land border with India.“The DEA will have to issue the notification under FEMA (Foreign Exchange Management Act). It will be notified very soon. It requires a lot of fine-tuning,” DPIIT Joint Secretary Jai Prakash Shivahare told reporters.He added that the government is also identifying sub-sectors whose investment applications will be processed within 60 days.Under the new framework, FDI proposals in specified manufacturing segments such as capital goods, electronic capital goods, electronic components, polysilicon and ingot-wafer, along with any other sectors later identified by the committee of secretaries headed by the Cabinet Secretary, will be cleared within 60 days.Though the Department for Promotion of Industry and Internal Trade (DPIIT) has notified the changes, the DEA notification under FEMA is still awaited.Shivahare also said total FDI, including reinvested earnings, rose to USD 88.29 billion during April-February 2025-26, compared with USD 80.61 billion in 2024-25.Net FDI into the country increased sharply to USD 6.26 billion during April-February 2025-26, against USD 959 million in the full 2024-25 fiscal.Separately, DPIIT Secretary Amardeep Singh Bhatia said overall FDI inflows are likely to touch USD 90 billion in the full 2025-26 fiscal year.He said reform measures, free trade agreements and India’s fast economic growth are helping attract healthy investments.The department also said Invest India, the national investment promotion and facilitation agency, helped ground 60 projects worth over USD 6.1 billion during 2025-26.These investments span 14 states and are estimated to generate more than 31,000 potential jobs.About 42 per cent of the total grounded investment value has come from European nations.Continued participation from the United States, Japan, South Korea, Australia and other major source markets reflects broad-based international confidence in India’s regulatory environment and manufacturing capabilities.Emerging source countries such as Brazil, New Zealand and Canada also indicate diversification of India’s investment base.“India’s investment momentum is a direct outcome of policy clarity, institutional commitment, and the trust global investors place in our systems,” Bhatia said.Invest India MD and CEO Nivruti Rai told PTI that chemicals, pharmaceuticals, biotechnology and food processing accounted for around 65 per cent of grounded investments, driven by high-value projects.She added that sectors such as electronics system design and manufacturing, aerospace and defence, and auto/EV have also seen significant activity.Rai said the agency is currently focusing on 11 countries to attract higher inflows.
