New edition of FDI policy with curbs on China released

October 29,2020

The Ministry of Commerce on Wednesday released the latest edition of the consolidated policy for foreign direct investment (FDI), which incorporates all the measures and changes adopted by the government regarding foreign investments in the past one year.

The policy document said that the FDI policy came into effect from October 15.

The policy also includes the decisions taken by the government in the past few months, largely keeping in view the investments coming in from China.

"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," it said.

Further, a citizen of Pakistan or an entity incorporated in Pakistan can invest, only under the government route, in sectors or activities other than defence, space, atomic energy and sectors or activities prohibited for foreign investment.

As part of the Aatmanirbhar Bharat economic package in May, the government liberalised the FDI policy for several sectors, including defence, coal mining, digital news, contract manufacturing and single-brand retail trading.