The government will soon notify a framework for time-bound approval of investments by limited Chinese ownership companies in seven identified sectors, including rare-earth magnets and electronic components, under the recently eased foreign direct investment (FDI) norms. Officials said the move is aimed at building domestic capacity and promoting inflows, with gross FDI expected to reach $90 billion in fiscal 2026.
Although the Cabinet on March 10 relaxed the norms by allowing automatic approval route for foreign investors with up to 10% beneficial ownership from countries sharing land borders with India, the decision has not been formally notified yet, the officials said, requesting anonymity.
While the Department for Promotion of Industry and Internal Trade (DPIIT) issued the change through Press Note 2 of the 2026 series on March 15, the Cabinet decision has not yet been implemented as stakeholder consultation is ongoing to align it with the Foreign Exchange Management Act (FEMA), he said.
DPIIT joint secretary Jai Prakash Shivhare confirmed the development. “The Department of Economic Affairs will have to issue the notification under FEMA,” he said, adding that the inter-ministerial consultation process is ongoing as the changes require considerable “fine-tuning” with existing laws. He said that the new rules will come into effect soon.
The revised FDI norms are expected to help process about 600 pending investment applications, an official said. “The idea is to allow investment in sectors that are important to the Indian economy. Currently seven sectors have been identified. This will help India develop capacity in these sectors,” he said.
This policy provides regulatory approval to eligible applicants within 60 days.
The seven sectors identified are rare-earth permanent magnets, rare-earth processing, polysilicon and ingot-wafer, advanced battery components, electronic component manufacturing, capital goods manufacturing and electronic capital goods. Officials said additional sectors or activities may be added later after approval from the competent authority.
All such investments will still require political and security clearance, the official said. The Cabinet decision also specified that the automatic route would not apply to companies incorporated in China, Hong Kong, or any other land-border-sharing country such as Pakistan or Bangladesh.
Speaking at a press conference on Friday, DPIIT Secretary Amardeep Singh Bhatia said the strong fundamentals of the Indian economy remain a major attraction for global investors. He said that gross FDI is likely to reach $90 billion in 2025-26.
Shivhare said data through February 2026 supports that trend. India attracted gross FDI of $88.29 billion in the April-February period of 2025-26, while net FDI stood at about $6.3 billion during the same period. Gross FDI for the entire 2024-25 financial year was $80.65 billion, while net FDI was about $0.96 billion, he said.
Commenting on India’s policy environment, Bhatia said, “India’s investment momentum is a direct result of policy clarity, institutional commitment and the confidence that global investors have in our system.” He said that DPIIT is committed to further simplifying the processes and ensuring that investments translate into jobs, innovation and long-term value.
According to Bhatia, Invest India, the investment promotion and facilitation agency of DPIIT, has helped 60 projects achieve investment of over $6.1 billion in 2025-26. These investments are expected to generate more than 31,000 potential jobs.
