Cabinet eases Press Note 3 rules for investment from land-border countries

What happened

• The Cabinet changed the guidelines on investment from countries sharing a land border with India: non-controlling beneficial ownership of up to 10% from such countries is now allowed under the automatic route, subject to sectoral caps [PIB].
• Proposals in capital goods, electronic components, polysilicon and ingot-wafer manufacturing will be decided within 60 days [PIB].

Background

• Press Note 3 (2020) made government approval mandatory for FDI from land-border countries; beneficial ownership is defined using the PML Rules, 2005.

Why it matters

• This balances security screening against the need for supply-chain investment.