The government has eased norms for foreign direct investment from all countries that share land borders with India, including China, a PTI report said.
As per the report, the decision was taken at a Union Cabinet meeting chaired by Prime Minister Narendra Modi. The report added that under the new arrangements, foreign companies having shareholders from these countries required mandatory government approval for investments in India in any sector.
The report elaborated that the press note 3 of 2020 has been amended in this regard. The amendment will be applicable to countries that share land borders with India. These countries are China, Bangladesh, Pakistan, Bhutan, Nepal, Myanmar, and Afghanistan.
China’s FDI in India
China ranks 23rd with a 0.32 per cent share ($2.51 billion) in the total FDI equity inflows reported in India from April 2000 to December 2025.
Ties between the two countries nosedived significantly following the fierce clash in the Galwan Valley in June 2020, which 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.
India-China trade
China has emerged as India’s second-largest trading partner. In 2024-25, India’s exports to China contracted by 14.5 per cent to $14.25 billion, compared with $16.66 billion in 2023-24.
On the other hand, India’s imports from China rose 11.52 per cent in the financial year 2024-25 to $113.45 billion, up from $101.73 billion in FY2023-24. India- trade deficit with China was widened to $99.2 billion in the finacial year 2024-25 from $85 billion in FY2023-24.
During April-January 2025-26, India’s exports to China rose 38.37 per cent to $15.88 billion, while imports rose 13.82 per cent to $108.18 billion. At the end of the period, India’s trade deficit with China stood at $92.3 billion.