India Eyes Higher FDI Approval Limit to ₹15,000 Cr

The Indian government is actively considering a significant increase to the Foreign Direct Investment (FDI) approval threshold for projects that require clearance from the Cabinet Committee on Economic Affairs (CCEA).

The proposal would elevate the current limit from ₹5,000 crore to ₹15,000 crore, a move designed to improve the investment climate and enhance the ease of doing business across the nation.

Key Proposed Changes and Context

• The existing FDI approval limit of ₹5,000 crore has been in place since November 2015.
• The review is driven by prevailing economic conditions, inflationary pressures, and the expanding scale of investments.
• A committee of secretaries has also recommended raising the CCEA’s approval limit for government-approved FDI proposals.
• India’s cumulative FDI inflows exceeded $1.16 trillion between April 2000 and March 2026.

Streamlining Downstream Investments

Beyond the direct approval threshold, the government is also exploring ways to simplify norms for downstream investments. This initiative aims to streamline processes for indirect foreign investments within Indian companies.

Under the proposed changes, indirect foreign investments in Indian companies could be exempted from needing fresh approval. This exemption would apply if the upstream domestic company has already secured government clearance.

Currently, prior government approval is mandatory for downstream or indirect foreign investments in specific scenarios. These include sectors requiring government approval for FDI and investments originating from countries sharing a land border with India.

These comprehensive measures form part of the government’s broader strategy to attract increased foreign capital into the country. Major contributions to India’s FDI have historically come from nations such as Mauritius, Singapore, the United States, the Netherlands, Japan, the United Kingdom, and the United Arab Emirates.