What happened: Ministry of Commerce and Industry reports 29 FDI projects worth ₹4,895.65 crore under the revised automatic route

The Ministry of Commerce and Industry reported receiving 29 foreign direct investment (FDI) projects worth ₹4,895.65 crore under a revised FDI framework. The revised framework allows firms with up to 10% Chinese ownership to make investments through the automatic route (meaning no prior government approval before the investment is made).

The reported linkage is to the ownership-and-sector conditions introduced through a March amendment to Press Note 3 of 2020. Under the updated rule described in the Ministry’s reporting, entities with ownership by an entity based in a land-border country (LBC) can access automatic-route treatment when the investment falls within listed sectors.

The Ministry of Commerce and Industry also stated that filings covered proposals involving entities based in multiple jurisdictions, including Mauritius, the United States, the Republic of Korea, Japan, Singapore, Luxembourg, and the Cayman Islands.

Background and earlier position: Press Note 3 of 2020 and prior approval for land-border country-linked investments

Press Note 3 of 2020 established a special approach for foreign investment from countries sharing a land border with India (land-border countries). Under the earlier requirement described in the Ministry’s reporting, foreign investment from land-border countries needed government approval rather than being processed under the automatic route.

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