In a significant regulatory update, India has approved only one Foreign Direct Investment (FDI) proposal from China, valued at ₹1 crore. In contrast, the country has cleared 13 applications from Hong Kong, aggregating to ₹610.42 crore in the last financial year, as per official data.
This cautious approach stems from regulations introduced in April 2020 under Press Note 3 by the Department for Promotion of Industry and Internal Trade (DPIIT), which mandates prior government approval for investments from nations sharing a land border with India.
Overview of Recent FDI Approvals
Overall, the Indian government sanctioned 63 FDI proposals amounting to ₹10,292.67 crore (approximately $1.18 billion) during the fiscal period from April 2025 to March 2026.
Among these, Singapore emerged as the largest contributor, securing five proposals valued at ₹3,259.88 crore (around $382.52 million), followed by the United Kingdom with five approved proposals worth ₹2,477.67 crore (about $283 million). Thailand also made its mark with two proposals approved, amounting to ₹1,600 crore (approximately $180 million).
Modifications to Investment Norms
In March, the government took steps to ease certain aspects of Press Note 3, allowing investors with non-controlling beneficial ownership of up to 10% from land border nations to proceed under the automatic route, subject to existing sectoral caps and conditions.
However, the revised FDI guidelines clarified that companies from China, Hong Kong, or any other land bordering nations remain exempt from these relaxed norms.
Context of Chinese and Hong Kong Investments
Historically, India has not seen substantial investments from China; it ranks 23rd in terms of FDI equity inflows from April 2000 to March 2026, contributing just 0.32% of the total inflow at approximately $2.51 billion (around ₹16,162.25 crore).
In comparison, Hong Kong holds the 15th position with a share of 0.62% ($4.91 billion or ₹31,220.30 crore) in total FDI during the same period.
This trend appears consistent, as in the previous fiscal year, India approved only one Chinese FDI proposal valued at ₹28.71 crore ($3.44 million). In the 2024-25 fiscal year, a total of 82 proposals were cleared under the government route, involving an overall investment of ₹39,758 crore (approximately $4.72 billion).
From Hong Kong, 11 proposals worth ₹1,225.28 crore ($146.51 million) were given the green light in the same fiscal year.
