New Delhi, March 11 The government's decision to ease norms for FDI from China and other countries sharing land borders with India strikes a pragmatic balance between attracting capital, protecting strategic interests, and supporting supply-chain integration and access to advanced technologies, experts say.
They also said that the proposed 60-day expedited approval timeline for investments in specified sectors is a welcome step toward bringing greater certainty.
Neha Aggarwal, Partner, Deloitte India, said that the clarity on beneficial ownership brings long-awaited predictability to India's FDI regime.
"With foreign investment moderating in recent months, a 60-day approval timeline strikes a pragmatic balance between attracting capital and safeguarding strategic interests, while enabling supply-chain integration and access to advanced technologies," she said.
Shardul S Shroff, Executive Chairman, Shardul Amarchand Mangaldas & Co, said the proposed 60-day expedited approval for investments in specified sectors, such as manufacturing and electronics components, is a welcome step. The benefit will apply only where the majority shareholding and control of the Indian investee entity remain with domestic entities at all times.
"Given this stringent requirement, the expedited route may have limited applicability," Shroff said.
Rudra Kumar Pandey, Partner at Shardul Amarchand Mangaldas & Co, said the proposal to allow investments of up to 10 per cent without prior government approval introduces a pragmatic threshold under the Press Note 3 framework.
"By ensuring the exemption is available only where the investing entity is not controlled by persons from land-bordering countries, minority investments up to 10 per cent can proceed more smoothly while retaining safeguards around control ownership," he said.
Think tank GTRI said that the easing of investment restrictions creates an opening for cross-border investment, but the scale and depth of manufacturing that ultimately develops in India will depend on broader economic conditions.
"The policy change is best seen as an opportunity for India to attract more substantial manufacturing investment over time. To realise this potential, India must further strengthen its competitiveness by lowering the cost of manufacturing," GTRI Founder Ajay Srivastava said.
Rahul Turki, Partner and Global Value Chain Ecosystem Leader, Grant Thornton Bharat, said that the move significantly reduces friction for global private equity and venture capital funds where such investors may have minority exposure.
"From an investment perspective, this move could unlock capital flows into startups, deep-tech ventures, and manufacturing value chains such as electronics components and solar supply chains," he said.
Krishan Arora, Partner and Leader, Indirect Tax and India Investment Advisory, Grant Thornton Bharat, said that the amended FDI guidelines pave the way for increased trade between countries bordering India, such as China and Bangladesh, with the aim of promoting ease of doing business, boosting manufacturing in sectors like electronics and solar, and attracting larger inbound investment.