Economy & Business
Easier FDI from countries sharing a land border
On 10 March 2026 the Cabinet eased Press Note 3: up to 10% non-controlling ownership from land-border countries may use the automatic route.
On 10 March 2026 the Cabinet eased the rules of Press Note 3 of 2020, under which any investment from a country sharing a land border with India needed government approval. Investors whose non-controlling beneficial ownership from such a country is up to 10 per cent may now come in under the automatic route. Proposals in capital goods, electronic capital goods, electronic components, polysilicon and ingot-wafer manufacturing will be decided within 60 days, provided control stays with resident Indians.
Press Note 3 was issued in April 2020 to stop opportunistic takeovers during the pandemic.
Test yourself
Question 1
After the March 2026 changes, up to what level of non-controlling beneficial ownership from a land-bordering country can an investment come in under the automatic route?
- A5 per cent
- B10 per cent
- C26 per cent
- D49 per cent
Show the answer and explanation
Correct answer: B
Explanation
Non-controlling beneficial ownership of up to 10 per cent is now allowed under the automatic route.
Above that, the government route of Press Note 3 still applies.
- Concept
- FDI from land-border countries: threshold
- Typical time
- 50 seconds
- Written from
- pib.gov.in
Question 2
The rule that every investment from a country sharing a land border with India needs government approval was introduced by
- AThe FEMA Act of 1999
- BThe Union Budget of 2024
- CPress Note 1 of 2016
- DPress Note 3 of 2020
Show the answer and explanation
Correct answer: D
Explanation
Press Note 3, issued in April 2020, put such investments on the government route.
It aimed to stop opportunistic takeovers of Indian companies during the pandemic.
- Concept
- Press Note 3
- Typical time
- 65 seconds
- Written from
- pib.gov.in
Question 3
Within how many days will proposals from land-bordering countries in sectors such as electronic components and capital goods now be decided?
- A30 days
- B60 days
- C90 days
- D120 days
Show the answer and explanation
Correct answer: B
Explanation
Such proposals are to be decided within 60 days.
Majority shareholding and control must stay with resident Indians.
- Concept
- Expedited FDI clearance
- Typical time
- 50 seconds
- Written from
- pib.gov.in