Govt to Ease FDI Paperwork for Firms With Low Chinese Ownership
India considers simplifying FDI rules for firms with under 10% Chinese ownership to boost investment and streamline approvals.
In a move to streamline foreign investments and reduce bureaucratic hurdles, the Indian government is considering easing FDI paperwork for companies that have less than 10 per cent Chinese ownership. According to sources, this proposed shift aims to simplify application processes and cut down on the procedural requirements that currently hinder entities with minority Chinese shareholding from investing in India.
Simplifying the Press Note 2 Framework
This potential policy shift follows previous revisions to the Foreign Direct Investment (FDI) rules, specifically those targeting investments from nations that share a land border with India. In March 2026, the Department for Promotion of Industry and Internal Trade (DPIIT) issued Press Note 2, which updated the framework originally established under Press Note 3 of 2020.
Under the current revised framework, any investment involving entities or beneficial owners from countries sharing a land border with India remains subject to government approval where applicable. The policy also outlines strict reporting requirements and defines beneficial ownership for both direct and indirect investments from these countries, even in cases where prior government approval is not mandatory.
Boosting Domestic Manufacturing
Beyond investment rules, the government is aggressively pursuing its import substitution mission. Sources reveal that the DPIIT has already finalized a list of 100 priority products. The goal is to strengthen domestic manufacturing capabilities and significantly reduce India's reliance on imports.
To turn this list into reality, the government is currently conducting consultations with various ministries and key stakeholders to formalize the roadmap for the domestic production of these identified products.
Empowering the Startup Ecosystem
The government is also taking significant steps to ensure that Indian startups have better access to capital. Two major initiatives have been highlighted:
Fund of Funds 2.0
To strengthen startup financing, the government has finalized 15 Alternative Investment Funds (AIFs) under the Fund of Funds 2.0 initiative. To support this, an amount of Rs 270 crore has been earmarked for the Small Industries Development Bank of India (SIDBI) to facilitate these investments, providing a much-needed boost to the entrepreneurial ecosystem.
The BHASKAR Platform Overhaul
In a bid to improve digital infrastructure for entrepreneurs, the DPIIT is planning a complete overhaul of the BHASKAR platform. Designed as a Startup Knowledge Registry, the revamped platform is intended to enhance connectivity and information-sharing across the startup landscape. This updated version is expected to be rolled out in the first half of 2027.
Together, these initiatives signal a broader government strategy to simplify the ease of doing business, foster self-reliance in manufacturing, and provide robust financial and digital support to the next generation of Indian entrepreneurs.