The Indian government is contemplating an increase in the foreign investment proposal threshold from Rs 5,000 crore to Rs 15,000 crore, aiming to foster a more favourable environment for larger overseas deals and streamline approval processes.
India’s government is weighing a sharper increase in the level of foreign investment proposals that must go before the Cabinet Committee on Economic Affairs, with the ceiling under review seen rising to Rs 15,000 crore from Rs 5,000 crore, according to Business Standard. The move is intended to make the country look more welcoming to overseas capital as officials assess whether larger transactions can be handled further down the approval chain.
The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi and attended by senior ministers including the home and finance ministers, currently clears proposals involving total foreign equity inflows above Rs 5,000 crore. Business Standard said that below that point, the relevant ministry decides. The threshold has been unchanged since November 2015, and sources quoted by the paper said inflation, bigger deal sizes and the need to improve ease of doing business are among the reasons for revisiting it. A committee of secretaries has already recommended lifting the limit, although the matter remains under discussion.
Officials are also looking at separate changes to downstream investment rules, which could reduce the need for fresh government approval when a domestic company with prior clearance makes indirect foreign investments. At present, such approval is required for sectors on the government route and for investments linked to countries sharing a land border with India, according to the current foreign investment framework published by the Department for Promotion of Industry and Internal Trade. DPIIT’s latest FDI newsletter shows cumulative inflows reached more than $1.16 trillion between April 2000 and March 2026, underscoring the scale of the market the government is trying to keep open.
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