India approves only 1 Chinese FDI proposal worth ₹1 crore in FY26; 13 from Hong Kong cleared

The Indian government approved just one Chinese Foreign Direct Investment (FDI) proposal worth ₹1 crore during the financial year 2025-26, according to official data from the Department for Promotion of Industry and Internal Trade (DPIIT). In the same period, 13 proposals from Hong Kong, amounting to ₹610.42 crore, received clearance.

These approvals remain significant as investments from countries sharing a land border with India have required prior government approval since April 2020, under Press Note 3 of the DPIIT. The measure was introduced to prevent opportunistic takeovers and acquisitions of Indian companies during the COVID-19 pandemic.

Overall, the government approved 63 FDI proposals worth ₹10,292.67 crore (approximately $1.18 billion) between April 2025 and March 2026. Singapore led in value terms with five proposals worth ₹3,259.88 crore ($382.52 million), followed by the United Kingdom with five proposals worth ₹2,477.67 crore ($283 million). Thailand secured approval for two proposals worth ₹1,600 crore (about $180 million).

In March, the government eased Press Note 3 of April 2020. The revised norms allow investors with non-controlling beneficial ownership of up to 10% in land-border countries to invest through the automatic route, subject to applicable sectoral caps, entry routes, and other conditions. However, the relaxation does not apply to entities registered in China, Hong Kong, or other countries sharing land borders with India.

Countries that share land borders with India include China, Bangladesh, Pakistan, Bhutan, Nepal, Myanmar, and Afghanistan. India has historically received limited direct investment from China. Between April 2000 and March 2026, China ranked 23rd, contributing only 0.32% of total FDI equity inflows, amounting to $2.51 billion (₹16,162.25 crore). Hong Kong, in comparison, was at 15th position with a 0.62% share, totaling $4.91 billion (₹31,220.30 crore).

The trend of minimal Chinese FDI approvals is not new. In 2024-25, India also approved only one Chinese FDI proposal, valued at ₹28.71 crore ($3.44 million). That fiscal year saw 82 proposals approved under the government route, with total investment of ₹39,758 crore ($4.72 billion). From Hong Kong, 11 proposals worth ₹1,225.28 crore ($146.51 million) were approved in 2024-25.

The latest data underscores the cautious approach India has maintained toward investments from China and related territories since the border tensions and the pandemic-related security concerns. While the easing of norms for some land-border countries indicates a selective opening, the exclusion of China and Hong Kong suggests a continued policy of scrutiny.