Govt eases norms for FDI from China

FASTER NOD FOR PROPOSALS IN HIGH-TECH SECTORS

- MUKESH JAGOTA

CHINESE INVESTMENTS IN the manufacturing sectors may get a boost, with the Cabinet on Tuesday clearing relaxed guidelines for approving investment from countries sharing a land border with India.

Fast-track clearance for companies in high-tech manufacturing is a key element of the new policy. In addition, the "automatic route" for foreign direct investment (FDI) approval will be available for companies where persons or entities from these neighbouring countries have up to 10% beneficial ownership and do not exercise control.

The decision marks a significant relaxation of Press Note 3, which introduced an extra layer of security scrutiny for investment proposals from immediate neighbours in April 2020.

The move comes at a time when capital flows into the country have weakened—FDI inflows recorded a net outflow of $3.7 billion in the third quarter this fiscal, higher than the $2.8billion net outflow in Q3FY25.