India Approves ₹1 Cr Chinese FDI Amid Strict Scrutiny
By Business Desk
India greenlit a single Chinese FDI proposal worth ₹1 crore in FY26, underscoring continued stringent oversight on investments from bordering nations.
India approved only one foreign direct investment (FDI) proposal from China, valued at ₹1 crore, during the 2025-26 fiscal year. This decision highlights the government’s ongoing rigorous examination of investments originating from nations sharing a land border with India.
In contrast, Hong Kong saw 13 investment proposals receive government clearance within the same period. These approvals amounted to over ₹610 crore, demonstrating a differentiated approach to inbound capital.
Understanding the Regulatory Framework
This cautious stance is primarily driven by Press Note 3, which was implemented in April 2020. This regulation mandates prior government approval for any investment coming from countries that border India.
- China
- Bangladesh
- Pakistan
- Nepal
- Myanmar
- Bhutan
- Afghanistan
While limited relaxations to these regulations were introduced in March, entities registered in China and Hong Kong were specifically excluded. This ensures they continue to undergo a more stringent approval process compared to other international investors.
Key Investment Figures for FY2025-26
Beyond border-specific restrictions, India successfully attracted significant capital from various global regions during FY2025-26. These figures illustrate the broader landscape of approved FDI:
- China: 1 proposal, ₹1 crore
- Hong Kong: 13 proposals, ₹610 crore
- Singapore: 5 proposals, ₹3,259.88 crore
- United Kingdom: ₹2,477.67 crore
- Thailand: 2 projects, ₹1,600 crore
Historical Context of Border Nation FDI
Historically, direct Chinese participation in India’s FDI landscape has remained relatively modest. It accounted for approximately 0.32% of total FDI equity inflows between April 2000 and March 2026.
- Chinese FDI: Approximately $2.51 billion (0.32% of total FDI equity inflows)
- Hong Kong FDI: 0.62% share of total FDI equity inflows
Hong Kong is consistently treated as a separate entity in government filings for these purposes. This data underscores India’s policy of selective engagement, where capital flows from major global hubs remain robust, while direct investment from bordering nations continues to be highly regulated.