Govt relaxes FDI norms for China, other countries sharing border with India: Report

They said press note 3 of 2020 has been amended in this regard.

The decision was taken in a meeting of the Union Cabinet chaired by Prime Minister Narendra Modi.

However, Information and Broadcasting Minister Ashwini Vaishnaw did not make any announcements in this regard during the media briefing on cabinet decisions.

The department for promotion of industry and internal trade (DPIIT) said that "no such announcement has been made by the Cabinet today".

DPIIT is an arm of the commerce and industry ministry which deals with issues related to FDI.

Earlier, under this press note, foreign companies having shareholders from countries sharing a border with India were required to obtain mandatory government approval for investments in India in any sector.

Countries that share land borders with India are China, Bangladesh, Pakistan, Bhutan, Nepal, Myanmar, and Afghanistan.

China stands at the 23rd position with only 0.32% share ($2.51 billion) in the total FDI equity inflow reported in India from April 2000 to December 2025.

Ties between the two countries nosedived significantly following the fierce clash in Galwan Valley in June 2020 that marked the most serious military conflict between the two sides in decades.

Following these tensions, India banned more than 200 Chinese mobile apps such as TikTok, WeChat, and Alibaba's UC browser, among others.

Though India has received minimal FDI from China, bilateral trade between the two nations has grown multi-fold.

China has emerged as India's second-largest trading partner.

In 2024-25, India's exports to China contracted by 14.5% to $14.25 billion, as against $16.66 billion in 2023-24. Its imports, however, rose by 11.52% in 2024-25 to $113.45 billion, compared to $101.73 billion in 2023-24. Thus, the trade deficit widened to $99.2 billion in 2024-25 from $85 billion in 2023-24.

During the April-January period of 2025-26, India's exports to China surged by 38.37% to $15.88 billion, while imports increased by 13.82% to $108.18 billion. The trade deficit stood at $92.3 billion.