29 FDI Investments Worth ₹4,895.65 Crore Reported Under Revised Framework

Executive Summary As of 20 August 2026, 29 FDI investments totaling ₹4,895.65 crore have been reported under a revised framework aimed at streamlining foreign investment with non-controlling beneficial ownership from Land Bordering Countries (LBC). Notified on 1 May 2026, the reform removes the requirement for prior government approval for LBC ownership up to 10%, transitioning these investments to the automatic route. This policy change, established via Press Note 2 of 2026, seeks to reduce transaction times and enhance the ease of doing business in India.

Key Points / Main Content

Regulatory Framework and Reforms

• Legislative Basis: The reforms were introduced through Press Note 2 of 2026 and a subsequent amendment to the Foreign Exchange Management (Non-debt Instruments) Rules, 2019, notified on 1 May 2026.
• Beneficial Ownership Test: The beneficial ownership test is now applied strictly at the level of the investor entity.
• Approval Exemption: Prior Government approval is no longer required for investments involving non-controlling LBC ownership of up to 10%.
• Automatic Route Access: Eligible investors can proceed via the automatic route, provided they adhere to sectoral caps and other entry conditions.

Investment Statistics and Jurisdictions

• Reported Figures: A total of 29 investments worth ₹4,895.65 crore were recorded by 20 August 2026.
• Key Sectors: Investments span Information Technology, Artificial Intelligence, Manufacturing, Pharmaceuticals, Data Centres, and Transport Services.
• Origin Jurisdictions: Participating entities are based in Mauritius, the United States, Republic of Korea, Japan, Singapore, Luxembourg, and the Cayman Islands.

Comparison with Previous Policy

• Former Requirement: Under Press Note 3 of 2020, any beneficial ownership from LBCs, regardless of how small, required prior Government approval.
• Reform Objective: The new framework addresses long-standing investor concerns by providing greater certainty and reducing administrative delays.

Impact Analysis

Foreign Investors (with <10% non-controlling LBC ownership) Impact Investors benefit from a faster investment process and reduced transaction costs by bypassing the prior Government approval requirement. The shift to the automatic route provides greater regulatory certainty and removes barriers for entities with minor LBC holdings.

Action Required Investors must report relevant investment information to the Government after proceeding with the investment, ensuring they remain within applicable sectoral caps and entry conditions.

Ministry of Commerce & Industry / Government of India Impact The Government has simplified the FDI inflow process to strengthen the "ease of doing business" in India. By focusing on the investor entity level for ownership tests, the administrative burden of reviewing minor LBC ownership cases is reduced.

Action Required The Government must receive and process reported information from investors who utilize the revised framework to ensure compliance with the new 10% non-controlling threshold and sectoral regulations.