Overview
- DPIIT on March 16 notified an amendment permitting overseas companies with up to 10% Chinese shareholding to invest via the automatic route subject to sectoral caps and conditions.
- The relaxation does not apply to entities registered in China, Hong Kong or other countries sharing a land border with India, which remain under the government route.
- The policy aligns the definition of beneficial owner with the PMLA, setting control at ownership of more than 10% of shares, capital or profits.
- Investments with any direct or indirect ownership from a land‑border country that do not require prior approval must be reported under DPIIT’s Standard Operating Procedure.
- Any transfer that results in beneficial ownership by a person from a land‑border country requires prior approval, the changes take effect upon a FEMA notification, and DPIIT has indicated a 60‑day fast‑track for eligible proposals.