The government in New Delhi has eased foreign direct investment (FDI) norms for China and other countries sharing land borders with India, allowing overseas firms with up to 10% ownership from these nations to invest in the country without mandatory approval. Previously, firms with shareholders from these nations, even with a single share, needed mandatory approval to invest in any sector. However, other FDI norms, including sectoral caps and entry routes, still apply. Investments will also require prior reporting to the DPIIT (Department for Promotion of Industry and Internal Trade). The government has amended press note 3 of 2020 in this regard, and the decision was made in a meeting chaired by Prime Minister Narendra Modi. The amendment clarifies the definition and criteria for "Beneficial Ownership," a key concept under the 2003 Money Laundering Rules. The beneficial ownership test will be applied at the level of the investor entity. The government states that investors with non-controlling land border countries (LBCs) with up to 10% ownership are permitted under the applicable sectoral caps and entry routes. The government has also decided to expedite the clearance of investment proposals from LBCs in specific sectors. Proposals from LBC investments in manufacturing, electronic capital goods, electronic components, polysilicon, or ingot-wafer, or any other sector/activity added by the Cabinet Secretary-headed committee, will be processed and decided within 60 days. In these cases, the majority shareholding and control will be with resident Indian citizens and/or resident Indian entities owned and controlled by resident Indian citizens. The government amended the FDI policy on April 17, 2020, through press note 3 (2020), to curb opportunistic takeovers/acquisitions of Indian companies due to the COVID-19 pandemic. Following this, entities from countries sharing a land border with India or where the beneficial owner of an investment into India is situated in or a citizen of any such country, can invest only after obtaining government approval. Any transfer of ownership of existing or future FDI in an entity in India resulting in the beneficial ownership falling within these jurisdictions also requires government approval. This rule was seen as adversely affecting investment flows from investors, including global funds. The new guidelines are expected to provide clarity and ease of doing business in India, and facilitate investments that can contribute to greater FDI inflows, access to new technologies, domestic value addition, expansion of domestic firms, and integration with the global supply chain. This would help leverage and enhance India's competitiveness as a preferred investment and manufacturing destination. Countries sharing land borders with India include China, Bangladesh, Pakistan, Bhutan, Nepal, Myanmar, and Afghanistan. China's FDI equity inflow into India from April 2000 to December 2025 is currently 0.32%, or USD 2.51 billion. This development comes at a time when the industry has been demanding easing of these norms. Industry experts have urged the government to ease Press Note 3 rules, as foreign firms with even tiny Chinese shareholding required approval under this route.