India to fast-track FDI approvals in 7 sectors under eased China-linked investment norms

THe authorities testament shortly notify a fabric for time-bound approvals of investments by companies with modified Chinese ownership in seven identified sectors, including rare-earth magnets and electronic components, under recently eased foreign direct investment (FDI) norms. The move is aimed at building domestic capacity and boosting inflows, with gross FDI expected to touch $90 billion in FY26, officials said.Although the Cabinet on March 10 relaxed Press Note 3 (PN3 of the 2020 series) by allowing the automatic approval route for overseas investors with up to 10% beneficial ownership from countries sharing a land border with India, the decision is yet to be formally notified, the officials said, requesting anonymity.While the Department for Promotion of Industry and Internal Trade (DPIIT) issued the change through Press Note 2 of the 2026 series on March 15, the Cabinet decision has not yet come into force as stakeholder consultations are underway to align it with the Foreign Exchange Management Act (FEMA), they said.DPIIT joint secretary Jai Prakash Shivahare confirmed the development. “The Department of Economic Affairs will have to issue the notification under FEMA,” he said, adding that the inter-ministerial consultation process is continuing because the changes require considerable “fine-tuning” with existing laws. He said the new norms would come into effect very soon.The revised FDI norms are expected to help process around 600 pending investment applications, one of the officials said. “The idea is to allow investments in sectors that are critical for the Indian economy. Seven sectors have currently been identified. It will help India develop capacity in these areas,” he said.The policy provides for regulatory clearances to eligible applicants within 60 days.The seven identified sectors are rare-earth permanent magnets, rare-earth processing, polysilicon and ingot-wafer, advanced battery components, electronic component manufacturing, capital goods manufacturing, and electronic capital goods. Additional sectors or activities may be added later with approval from the competent authority, officials said.All such investments will still require political and security clearances, the official added. The Cabinet decision also specified that the automatic route would not apply to companies incorporated in China, Hong Kong, or any other land-border-sharing country such as Pakistan or Bangladesh.Speaking at a press conference on Friday, DPIIT secretary Amardeep Singh Bhatia said the strong fundamentals of the Indian economy remained a major attraction for global investors. He said gross FDI in 2025-26 is likely to reach $90 billion.Shivahare said data up to February 2026 supported that trend. India attracted gross FDI of $88.29 billion in the April-February period of 2025-26, while net FDI during the same period stood at about $6.3 billion. Gross FDI in the full 2024-25 fiscal year was $80.65 billion, while net FDI was around $0.96 billion, he said.Commenting on India’s policy environment, Bhatia said, “India’s investment momentum is a direct outcome of policy clarity, institutional commitment, and the trust global investors place in our systems.” He added that DPIIT remains committed to further simplifying processes and ensuring that investments translate into jobs, innovation, and long-term value.According to Bhatia, Invest India, DPIIT’s investment promotion and facilitation agency, has helped in getting 60 projects worth over $6.1 billion investments in 2025-26. These investments are estimated to generate more than 31,000 potential jobs.