In FY'26, India approves just 1 Chinese FDI proposal while 13 from Hong Kong

New Delhi: In the last financial year, India has approved only one Chinese FDI proposal worth Rs 1 crore, alongside 13 applications from Hong Kong valued at Rs 610.42 crore, as per official data. These approvals matter because, since April 2020, any investment into India from countries that share a land border with it requires prior government clearance under Press Note 3 issued by the Department for Promotion of Industry and Internal Trade (DPIIT).

The rule was introduced during the COVID-19 pandemic to prevent opportunistic takeovers or acquisitions of distressed Indian companies by foreign entities.

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Overall, the government has approved 63 FDI (foreign direct investment) proposals worth Rs 10,292.67 crore, or USD 1.18 billion, during April 2025-March 2026, according to the DPIIT data.

Singapore emerged as the largest source of approved FDI proposals in value terms, with five proposals worth Rs 3,259.88 crore (USD 382.52 million) receiving clearance.

This was followed by the UK, where five proposals worth Rs 2,477.67 crore (USD 283 million) were approved, and Thailand, which received approval for two proposals worth Rs 1,600 crore (about USD 180 million).

In March, the government eased Press Note 3 of April 2020. Under that, it stated that investors with non-controlling LBC (land border countries) beneficial ownership of up to 10 per cent would be permitted under the automatic route, according to the applicable sectoral caps, entry routes, and other conditions.

However, it was clarified that the relaxed FDI norms will not apply to entities registered in China/Hong Kong or other countries sharing land borders with India.

Countries that share land borders with India are China, Bangladesh, Pakistan, Bhutan, Nepal, Myanmar, and Afghanistan.

India has never received significant investments directly from China. China ranks 23rd, accounting for only 0.32 per cent of total FDI equity inflows into India between April 2000 and March 2026, at USD 2.51 billion (Rs 16,162.25 crore).

On the other hand, Hong Kong was at 15th position with only a 0.62 per cent share (USD 4.91 billion or Rs 31,220.30 crore) in the total FDI equity inflow reported during that period.

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Like 2025-26, India had approved only one Chinese FDI proposal in 2024-25 also. It was valued at Rs 28.71 crore (USD 3.44 million). In that fiscal, a total of 82 proposals were approved under the government route, involving a total investment of Rs 39,758 crore (USD 4.72 billion).

From Hong Kong, 11 proposals worth Rs 1,225.28 crore (USD 146.51 million) received approval in 2024-25.

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