The government has eased foreign direct investment (FDI) norms for countries sharing land borders with India, including China, by amending Press Note 3 of 2020, government sources said on Tuesday, reported news agency PTI.The decision was approved at a Union Cabinet meeting chaired by Prime Minister Narendra Modi, sources added.Under Press Note 3 introduced in 2020, foreign companies with shareholders from countries sharing land borders with India were required to obtain mandatory government approval for investments in any sector.Countries that share land borders with India include China, Bangladesh, Pakistan, Bhutan, Nepal, Myanmar and Afghanistan.
China currently ranks 23rd among investors in India, accounting for about 0.32% share ($2.51 billion) of the total FDI equity inflows received by the country between April 2000 and December 2025.Economic relations between India and China came under strain after the Galwan Valley clash in June 2020, which marked the most serious military confrontation between the two countries in decades.Following the tensions, India banned more than 200 Chinese mobile applications, including TikTok, WeChat and Alibaba’s UC Browser.
Although FDI inflows from China have remained limited, bilateral trade between the two countries has expanded significantly, with China emerging as India’s second-largest trading partner.In 2024–25, India’s exports to China declined 14.5% to $14.25 billion from $16.66 billion in 2023–24, while imports rose 11.52% to $113.45 billion compared with $101.73 billion in the previous year. As a result, the trade deficit widened to $99.2 billion in 2024–25 from $85 billion in 2023–24.During April–January 2025–26, India’s exports to China increased 38.37% to $15.88 billion, while imports rose 13.82% to $108.18 billion, resulting in a trade deficit of $92.3 billion, according to official data
