Targeting faster investments with tighter oversight, India clears 40 sectors for expedited FDI approvals from neighbouring countries, while enforcing ownership controls and stricter disclosure norms.
The Government of India has identified 40 manufacturing sub-sectors for faster approval of foreign direct investment (FDI) proposals from countries that share land borders with India, according to a report by the Press Trust of India (PTI).
Under a revised standard operating procedure, FDI applications from nations including China, Pakistan, Bangladesh, Nepal, Bhutan, Myanmar, and Afghanistan in these sectors will be processed within 60 days. The move follows a policy decision in March 2026 to expedite approvals in selected manufacturing segments while maintaining regulatory oversight.
Officials have stated that, despite the accelerated process, ownership and control of the recipient entity must remain with resident Indian citizens or Indian-owned companies at all times.
The identified sub-sectors fall across six broad categories: capital goods manufacturing, electronic capital goods and components, polysilicon and wafer production, advanced battery components, rare earth magnets, and rare earth processing.
Specific areas include equipment such as castings and forgings for power plants, machine tools, display panels, camera modules, capacitors, audio components, lithium-ion batteries, wearable devices, and facilities for rare-earth metals and magnet production.
The updated framework also introduces additional reporting requirements for investments involving entities with direct or indirect links to land-bordering countries. According to the Department for Promotion of Industry and Internal Trade, disclosures will be governed by the Foreign Exchange Management regulations, with data accessible to the Reserve Bank of India.
Responsibility for compliance lies with the Indian investee company, which must submit details prior to receiving foreign capital or executing relevant transactions. Required disclosures include shareholding structures, beneficial ownership, organisational hierarchy, board composition, key management personnel, and control rights.
Companies are also required to provide incorporation details and outline any existing or proposed ownership links with entities based in neighbouring countries, as part of the approval process.
