New Delhi: Twenty-nine foreign direct investment (FDI) proposals amounting to a combined ₹5,000 crore have been reported to the government under the revised framework for investments with ownership linkages to countries sharing land borders, the Department for Promotion of Industry and Internal Trade (DPIIT) said on Friday. The submissions, recorded up to August 20, cover a range of sectors including Information Technology, Artificial Intelligence, data centres, manufacturing, pharmaceuticals and transport services.
What changed: the rule tweak
The shift follows Press Note 2 of 2026 and a corresponding amendment to the Foreign Exchange Management (Non-debt Instruments) Rules, 2019, notified on 1 May 2026. Previously under Press Note 3 of 2020, any investor with beneficial ownership linked to a Land Bordering Country (LBC) required prior government approval, even where the LBC-linked stake was negligible. The new approach applies the beneficial ownership test at the level of the investor entity and permits investors with non-controlling LBC ownership of up to 10% to invest through the automatic route, subject to sectoral caps and other conditions.
Early market response
DPIIT said the 29 proposals — reported between the rule change and 20 August — span strategic and high-growth domains. Officials highlighted the participation of projects in Artificial Intelligence, data centres and manufacturing as indicators that the clarification has reduced previous friction in investment decisions.
"The revised framework reflects our commitment to making India's FDI policy both robust and investor-friendly... By calibrating scrutiny to actual ownership and control rather than treating every LBC linkage alike, we have removed an unnecessary layer of delay while retaining the safeguards that matter," Jai Prakash Shivhare, Joint Secretary, DPIIT, said.
The DPIIT added that an investor entity can now proceed under the automatic route by reporting the required information to the government, without waiting for prior approval — a change expected to speed up deal closures and cut administrative delays.
- Sectors reporting proposals: Information Technology, Artificial Intelligence, Information & Communication, Manufacturing, Pharmaceuticals, Data Centres, Transport Services.
- Reported value: ₹5,000 crore across 29 proposals (as of 20 August 2026).
- Regulatory milestone: Amendment to FEMA (Non-debt Instruments) Rules, 2019; Press Note 2 of 2026 replaces prior automatic-approval restrictions from Press Note 3 of 2020.
Numbers at a glance
| Metric | Figure |
|---|---|
| FDI proposals reported | 29 |
| Aggregate reported investment | ₹5,000 crore |
| Notification date of new rules | 1 May 2026 |
Policy-makers framed the revision as targeted: it differentiates between controlling ownership and passive, small holdings by entities linked to LBCs. The intent is to preserve national security safeguards while removing blanket restrictions that had deterred or delayed investment under the earlier regime.
What it means for investors and industry
For inbound investors, the change narrows the situations requiring prior government approval, thereby:
- allowing faster deployment of capital where LBC-linked ownership is non-controlling and below the 10% threshold;
- reducing transaction risk and the time taken for clearances in affected sectors;
- providing clearer compliance steps — entities can report details and proceed under the automatic route subject to sectoral rules.
For Indian companies, the tweak can ease access to foreign capital for growth projects in technology, data infrastructure and manufacturing, potentially accelerating capacity additions and technology transfers. However, entities that involve higher levels of LBC ownership or control will continue to require prior approval, preserving the government's ability to vet sensitive cases.
Officials said the early pipeline of proposals suggests investors welcomed the calibrated approach, particularly where timelines and certainty matter for technology deployments and capital-intensive projects such as data centres and manufacturing lines.
While ₹5,000 crore across 29 proposals is an initial snapshot, the policy signal is as important as the immediate quantum: a clearer, ownership-focused regime reduces a known bottleneck and may encourage more sustained inflows across targeted sectors. For businesses and consumers, faster investment approvals could translate into quicker rollout of services, higher job creation in project areas and enhanced capacity in critical infrastructure over time.
— Business Desk
