Government nod mandatory for FDI from neighbouring countries

April 19, 2020 01:16 am | Updated December 03, 2021 06:26 am IST - NEW DELHI In a move that will restrict Chinese investments, the Centre has made prior government approval mandatory for foreign direct investments from countries which share a land border with India. “However, an entity of a country, which shares land border with India or where the beneficial owner of an investment into India is situated in or is a citizen of any such country, can invest only under the Government route.” Pakistani investors face further restrictions in requiring government approval for FDI in defence, space and atomic energy sectors as well. The total current and planned Chinese investment in India has now crossed $26 billion, according to estimates in the March 2020 Brookings reportpaper, titled "Following the Money: China Inc's Growing Stake in India-China Relations". The Brookings paper also noted that the flush of investment from China’s private sector poses new challenges for India’s regulators and warned that boundaries between China's state and private sectors are blurry at best, with some of China’s most prominent private technology companies -- including those that are major investors in India -- playing key roles in advancing government initiatives at home, including in running an effective censorship regime.