India has recorded 29 foreign direct investment (FDI) transactions involving proposed investments worth Rs 4,895.65 crore under its revised rules for investments connected to countries that share a land border with India, the Commerce Ministry said on August 21.
The investments, reported up to August 20, involve investors and entities from jurisdictions including Mauritius, the US, South Korea, Japan, Singapore, Luxembourg and the Cayman Islands.
The proposed investments cover a wide range of sectors, including information technology, artificial intelligence, information and communication services, manufacturing, pharmaceuticals, data centres and transport.
The transactions follow changes introduced to India’s FDI rules earlier this year. Under the revised framework, certain foreign investors with limited and non-controlling beneficial ownership linked to a country sharing a land border with India can invest through the automatic route without seeking prior government approval.
The new rules allow investors with up to 10% non-controlling beneficial ownership from land-bordering countries to use the automatic route, provided they comply with applicable sectoral caps, entry conditions and reporting requirements.
The Commerce Ministry said the reform is aimed at providing greater certainty to investors, reducing transaction delays and improving India’s ease of doing business.
India had tightened its FDI rules in April 2020 through Press Note 3, requiring government approval for investments involving entities from countries sharing a land border with India or investments where the beneficial owner was located in or was a citizen of such a country.
The framework was subsequently revised through Press Note 2 of 2026, issued by the Department for Promotion of Industry and Internal Trade (DPIIT) on March 15. The Union Cabinet approved the changes on March 10, while the related amendments to the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019 came into effect on May 1.
DPIIT Joint Secretary Jai Prakash Shivhare said the revised framework aims to make India’s FDI policy more investor-friendly while continuing to maintain necessary safeguards. He noted that the initial response, with 29 investments worth nearly Rs 5,000 crore across sectors such as AI, data centres and manufacturing, indicates that investors have welcomed the changes.
The revised policy also aligns the determination of beneficial ownership with the criteria under the Prevention of Money Laundering Rules, 2005.
While the automatic-route relaxation reduces the need for prior approval in eligible cases, investments must still comply with sector-specific conditions, applicable foreign investment limits and reporting requirements.
Overall, the revised FDI framework is aimed at balancing investment facilitation with national security safeguards while making it easier for eligible foreign investors to participate in India’s growing economy.
