Cabinet Approves FDI Policy Changes for Bordering Countries

Press Release Dated 10.03.2026

The Union Cabinet has approved amendments to the Foreign Direct Investment (FDI) policy governing investments from countries sharing land borders with India. The revised framework introduces regulatory clarity while facilitating investment flows under specified conditions.

1. Definition of ‘Beneficial Owner’

The amended policy introduces a formal definition of ‘Beneficial Owner’, aligning it with the definition prescribed under the Prevention of Money Laundering Act (PMLA) Rules.

This alignment ensures consistency between FDI regulations and anti-money laundering compliance frameworks.

2. Automatic Route for Limited Non-Controlling Ownership

Under the revised policy, investments with up to 10% non-controlling beneficial ownership from entities or individuals belonging to countries sharing land borders with India will now be permitted under the automatic route.

This provision aims to provide regulatory clarity while ensuring that minor, non-controlling investments are not subject to unnecessary approval requirements.

3. Faster Approval Timeline for Manufacturing Investments

The amended framework also introduces a 60-day approval timeline for investments in specified manufacturing sectors. This measure is intended to expedite regulatory approvals and facilitate timely investment inflows in strategic sectors.

4. Expected Impact of the Policy Changes

The revised guidelines are expected to:

• Improve clarity in the FDI approval framework
• Enhance ease of doing business in India
• Facilitate investments that bring advanced technologies
• Encourage domestic value addition and manufacturing growth
• Support the expansion of Indian firms and their integration into global supply chains

5. Contribution to Economic Growth

The policy reforms are expected to strengthen India’s position as a preferred global investment and manufacturing destination. Increased FDI inflows will supplement domestic capital, support the objectives of Atmanirbhar Bharat, and contribute to accelerated economic growth and industrial development.

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