Govt Eases FDI Norms for China, Other Countries Sharing Land Border with India

The government on Tuesday eased norms for foreign direct investment from all countries, including China, that share land borders with India, sources said.

They said press note 3 of 2020 has been amended in this regard.

The decision was taken in a meeting of the Union Cabinet chaired by Prime Minister Narendra Modi.

Under this press note, foreign companies having shareholders from these countries required mandatory government approval for investments in India in any sector.

Countries that share land borders with India are China, Bangladesh, Pakistan, Bhutan, Nepal, Myanmar, and Afghanistan.

China stands at the 23rd position with only 0.32% share ($2.51 billion) in the total FDI equity inflow reported in India from April 2000 to December 2025.

Ties between the two countries nosedived significantly following the fierce clash in Galwan Valley in June 2020 that marked the most serious military conflict between the two sides in decades.

Following these tensions, India banned over 200 Chinese mobile apps like TikTok, WeChat, and Alibaba's UC browser.

Though India has received minimal FDI from China, bilateral trade between the two nations has grown multi-fold.

China has emerged the second-largest trading partner of India.

In 2024-25, India's exports to China contracted 14.5% to $14.25 billion as against $16.66 billion in 2023-24. Imports, however, rose 11.52% in 2024-25 to $113.45 billion against $101.73 billion in 2023-24. The trade deficit was widened to $99.2 billion in 2024-25 from $85 billion in 2023-24.

During April-January 2025-26, India's exports to China rose 38.37% to $15.88 billion, while imports rose 13.82% to $108.18 billion. Trade deficit stood at $92.3 billion.