India continued its cautious approach toward foreign direct investment (FDI) from China during FY2025-26, approving only one Chinese investment proposal valued at ₹1 crore, while clearing 13 investment proposals from Hong Kong. The figures reflect the government’s continued screening of investments from countries that share a land border with India.
The stringent approval process stems from policy changes introduced in 2020, which require government clearance for FDI originating from neighboring countries. The framework was implemented to prevent opportunistic acquisitions of Indian companies and to safeguard strategic sectors and national security interests.
Despite limited approvals from mainland China, Hong Kong-based proposals continued to receive clearance after undergoing regulatory scrutiny and meeting the required compliance standards. Industry observers note that each proposal is evaluated on a case-by-case basis, considering ownership structures, sectoral implications, and security concerns.
The latest data underscores India’s ongoing emphasis on balancing foreign investment with strategic and economic security. While the country remains open to global capital, investments from neighboring nations continue to be subject to enhanced regulatory oversight under the existing FDI policy.