The Indian government is contemplating a significant increase in the foreign direct investment approval limit from ₹5,000 crore to ₹15,000 crore to accelerate decision-making and bolster overseas inflows amid a changing economic landscape.
The Centre is considering a major widening of the approval limit for foreign direct investment proposals that must go before the Cabinet Committee on Economic Affairs, lifting the ceiling to ₹15,000 crore from ₹5,000 crore, according to a senior government source. The move is intended to speed up decisions and make India more attractive to overseas capital as investment sizes rise and inflation changes the scale of large projects.
Under the current system, applications involving foreign equity inflows above ₹5,000 crore are sent to the high-level committee headed by Prime Minister Narendra Modi, while smaller proposals are handled by the relevant ministries. The threshold has not been revised since November 2015, when the government last adjusted the approval process to reduce delays and encourage larger inflows.
Officials are also weighing changes to downstream investment rules, which govern indirect foreign investment into Indian companies through domestic entities. At present, fresh government clearance is needed in some cases, including sectors that already require approval and investments linked to countries sharing a land border with India. The proposal under discussion would exempt some of those cases where the upstream domestic firm has already secured approval, a change aimed at simplifying compliance and supporting job creation.
The wider review fits a broader pattern of easing investment rules over time. In 2015, the government raised the CCEA threshold from ₹1,200 crore to ₹3,000 crore, and before that it had already moved to reduce bureaucratic friction by expanding the amount that could be cleared without cabinet scrutiny. More recently, Reuters has reported that the government has also been examining ways to soften restrictions linked to Press Note 3, which imposes extra scrutiny on investments from neighbouring countries.
India has been trying to sustain foreign inflows by streamlining policy and signalling a more open stance to investors. According to the source, overseas investment into the country crossed $1.16 trillion between April 2000 and March 2026, with Mauritius, Singapore, the US, the Netherlands, Japan, the UK and the UAE among the leading sources of capital.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
