What happened: easing of FDI routing under Press Note 3
The Government of India eased FDI approval conditions tied to Press Note 3 (April 2020). In March 2026, the Centre allowed FDI from entities with less than 10% stake in land-border countries to be routed through the automatic route without requiring express government approval, if the investor structure meets the stated condition.
Background and earlier position: Press Note 3 (April 2020) and approval route
Press Note 3 (April 2020) introduced an approval requirement for certain FDI involving land-border countries. The core idea was to place proposals in the government approval route for investments by entities linked to land-border countries, instead of letting them proceed under the automatic route.
What changed now: the <10% stake> condition
The March 2026 relaxation changed the operational handling of FDI proposals linked to land-border countries by creating a threshold condition. If the foreign investor entity has less than 10% stake in the relevant land-border country, then FDI can use the automatic route rather than the express approval path.