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The Ministry of Commerce and Industry said on 21 August 2026 that 29 foreign direct investment proposals worth Rs 4,895.65 crore had been reported under the relaxed Press Note 3 framework.
Press Note 3 was issued in April 2020 and extended the requirement of prior government approval to investment from every country sharing a land border with India; before that, only Bangladesh and Pakistan were covered.
The Union Cabinet approved easing the restriction on 10 March 2026, and it was given effect through an amendment to the Foreign Exchange Management (Non-debt Instruments) Rules notified in May 2026.
Under the revised norms, an investor with non-controlling beneficial ownership of up to 10 per cent from a land-border country may invest through the automatic route, subject to sectoral caps and conditions.
The reported investments span information technology, artificial intelligence, manufacturing, pharmaceuticals, data centres and transport services, and came from Mauritius, the United States, the Republic of Korea, Japan, Singapore, Luxembourg and the Cayman Islands.
DPIIT issues Press Note 3, extending the prior-approval requirement to investment from all countries sharing a land border with India.
The Galwan Valley clash occurs, after which the restriction is retained and tightened in practice.
The Union Cabinet approves easing of the Press Note 3 restrictions for small, non-controlling stakes.
The relaxation is given legal effect through an amendment to the Foreign Exchange Management (Non-debt Instruments) Rules, along with a 60-day timeline for processing proposals.
The Ministry of Commerce and Industry reports 29 proposals worth Rs 4,895.65 crore received under the revised framework.
| Aspect | Press Note 3 regime (2020-2026) | After the 2026 relaxation |
|---|---|---|
| Countries covered | Every country sharing a land border with India, plus beneficial owners located in or citizens of those countries | Same set of countries, but small non-controlling stakes are carved out |
| Route for a small indirect stake | Government approval route, whatever the size of the stake | Automatic route where non-controlling beneficial ownership is up to 10 per cent, subject to sectoral caps |
| Entities registered in China or Hong Kong | Government approval route | Government approval route - the carve-out does not extend to them |
| Processing | No fixed statutory timeline | A 60-day timeline introduced for processing proposals |
GS Paper III > Indian Economy > Investment Models and Effects of Liberalisation
General Awareness > FDI Policy, FEMA and Capital Flows
General Awareness > Indian Economy
An instrument through which DPIIT announces changes in India's FDI policy; the change takes legal effect once the corresponding FEMA rules are amended.
The channel under which foreign investment needs no prior government approval, subject to sectoral caps and conditions.
The channel under which foreign investment requires prior approval from the administrative ministry or department concerned.
The natural person who ultimately owns or controls an entity; for this purpose defined by reference to the Prevention of Money-laundering Act, 2002 and its Maintenance of Records Rules, 2005.
Department for Promotion of Industry and Internal Trade, the department under the Ministry of Commerce and Industry that frames FDI policy.