India’s recent easing of foreign direct investment regulations for neighbouring countries has garnered nearly Rs 4,896 crore in proposals across multiple sectors, signalling a cautious opening to foreign capital amid national security considerations.
India’s recent easing of foreign direct investment rules for investors linked to countries sharing a land border has already drawn nearly Rs 4,896 crore in proposals, according to the Ministry of Commerce and Industry. The ministry said on Friday that 29 investments had been reported under the revised framework by August 20, spanning information technology, artificial intelligence, communications, manufacturing, pharmaceuticals, data centres and transport services.
The policy shift, announced in March, allows foreign entities with non-controlling beneficial ownership from land-bordering countries to invest in India through stakes of up to 10%. That adjustment was designed to keep safeguards in place while opening the door to capital in sectors seen as important to growth and supply chains, according to industry briefings and legal analyses released after the change.
EY said in May that the government had amended the Foreign Exchange Management rules to set out a clearer test for beneficial ownership and to add a faster approval track for some key sectors where Indian shareholders hold a majority. Other specialist commentaries noted that the reform was built around a balance between national security concerns and the need to attract foreign capital, particularly into manufacturing and technology.
The latest figures suggest the revised regime is beginning to have an effect, even if the sums involved remain modest beside India’s wider investment needs. The ministry’s data indicate that interest has been spread across a broad mix of industries, which may encourage officials to present the policy as a controlled liberalisation rather than a full rollback of earlier restrictions.
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