India clears one small Chinese investment proposal

India approved just one Chinese FDI proposal worth ₹1 crore in the last financial year, according to official data. This is significant as investments from countries sharing a land border with India have been subject to prior government approval since April 2020.

The measure was introduced to curb opportunistic takeovers and acquisitions of Indian companies during the COVID-19 pandemic. In contrast, 13 applications from Hong Kong worth ₹610.42 crore received approval in the same period.

Overall, the government approved 63 FDI proposals worth ₹10,292.67 crore, or $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 ₹3,259.88 crore ($382.52 million) receiving clearance.

This was followed by the UK, where five proposals worth ₹2,477.67 crore ($283 million) were approved, and Thailand, which received approval for two proposals worth ₹1,600 crore (about $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% 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% of total FDI equity inflows into India between April 2000 and March 2026, at $2.51 billion (₹16,162.25 crore).

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

From Hong Kong, 11 proposals worth ₹1,225.28 crore ($146.51 million) received approval in 2024-25. The government’s approval process for FDI proposals from countries sharing a land border with India will continue to be closely watched.

The trend of low investment from China is likely to continue, given the current geopolitical situation. In contrast, investments from Hong Kong and other countries are expected to remain steady.

As the Indian government continues to monitor FDI proposals from countries sharing a land border with India, they compare this approach to similar situations in the past. For instance, the government’s decision to ease FDI norms for certain countries while maintaining restrictions on others may be seen as a way to balance economic interests with national security concerns.

In terms of sheer numbers, the approved FDI proposals from various countries paint a picture of India’s investment situation. Singapore, the UK, and Thailand are among the top sources of approved FDI proposals, while China and Hong Kong have a relatively small presence.

India’s investment situation is complex.