India to tweak FDI rules: How will it affect businesses?
What's the story
The Indian government is reportedly planning to revise its foreign direct investment (FDI) rules. The changes are aimed at attracting more overseas investments into the country, sources have told CNBC Awaaz. A draft Union Cabinet note proposing these changes has already been prepared and could receive its approval soon, they said.
Approval process
Proposed changes in FDI routing
The proposed changes may remove the need for fresh approval for any FDI routed through subsidiaries or downstream companies.
This is if the parent company has already obtained the necessary approval.
The government is also mulling over doing away with the Cabinet approval for certain FDI proposals above ₹5,000 crore.
Investment threshold
Increased investment limit for CCEA clearance
Under the proposed changes, FDI investments of up to ₹15,000 crore could be approved without the need for clearance from the Cabinet Committee on Economic Affairs (CCEA). This is a significant increase from the current limit and is expected to further streamline the investment process.
Investment surge
Rise in FDI inflows into India
The proposed changes come at a time when FDI inflows into India are on the rise. In FY 2025-26, FDI equity inflows increased by 18% to $58.84 billion.
Notably, investments from the United States more than doubled compared to the previous financial year.
These developments underscore India's growing appeal as an investment destination and the government's efforts to further liberalize its investment regime.