Under Press Note 3, any investment from countries sharing a land border with India — including China, Pakistan, Bangladesh, Myanmar, Nepal, Bhutan and Afghanistan — is allowed only through the government approval route.
| Photo Credit:
Steve Marcus
This is in addition to sectors such as capital goods, electronics and solar cells, announced by the government for favourable treatment on Tuesday, but an official list of such items is being compiled and will be notified, officials said at a media briefing on Wednesday.
Liberalised rules
The new liberalised rules, which now permit investments through the automatic route for entities linked to LBC countries with up to 10 per cent non-controlling beneficial ownership, will also hold for applications already under process subject to furnishing of relevant information by the investee, officials noted.
However, these norms will not apply to entities registered in China/Hong Kong or other countries sharing land borders with India. “All the restrictions for investors from LBCs are still applicable. There is no relaxation so far as entities or investors in LBCs are concerned. This relaxation is only for entities in non-LBCs and having beneficial owners from LBCs below 10 per cent and non-controlling stake… so there are no relaxations so far as investments from LBCs are concerned,” DPIIT Joint Secretary Jai Prakash Shivahare said.
Under Press Note 3 (PN3 of 2020), any investment from countries sharing a land border with India — including China, Pakistan, Bangladesh, Myanmar, Nepal, Bhutan and Afghanistan — is allowed only through the government approval route.
PN3 requirements
The easing of PN3 requirements have been brought about following discussions with stakeholders including high-profile institutional investors, such as BlackRock, had reportedly sought such easing of Press Note 3.
Currently, approximately 600 applications are pending under PN3, said DPIIT Secretary Amardeep Singh Bhatia. Many of these applications will now fall into two streamlined categories– those below the 10 per cent threshold and those eligible for the expedited mechanism.
If present applicants whose applications are already under process, qualify for the 10 per cent limit, they may proceed with their investments immediately following the official notification of the new rules, after filing the necessary disclosures, Bhatia said.
Current applicants who want to apply for the new expedited mechanism have the option to resubmit their applications. When asked about the sanctity of the shorter timelines, Bhatia said a specific framework has been established to ensure the 60-day timeline is strictly honored, offering much-needed certainty to potential investors.
Security clearances
Although in the expedited process, some steps have been done away with, broadly, the process of security clearances and political clearances will remain in place, the Secretary said.
The selection of sectors that will qualify for fast-tracking is based on the necessity to increase manufacturing in specific sectors in India, Bhatia said the list could be expanded in the future.
“We need manufacturing to take place in India, whether it is a sewing machine or whether it is an Industry 4.0 machine which are assembling solar cells, or whether it is switchgear and so on. So, these are areas in which we feel there is a large scope of partnership, and joint ventures…But having said that, this is not a watertight compartment,” Bhatia said.
Published on March 11, 2026