THE GIST
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New Delhi received 29 foreign direct investment proposals worth $500 million with one move: It decided to auto-approve investors from neighboring countries, like China, to hold non-controlling stakes of up to 10%.
WHAT HAPPENED
India’s commerce and industry ministry said the 29 approved proposals, worth 48.95 billion rupees or about $511 million, span across a range of industries including information technology, artificial intelligence, manufacturing, pharmaceuticals, data centers and transport services.
A government decision in May allowed an automatic-approval route for investors from land-bordering countries holding non-controlling stakes of up to 10%.
Previously, any investment tied to a beneficial owner in a bordering nation, a rule aimed squarely at China after the 2020 border clashes, required full government sign-off, regardless of stake size.
Concurrently, New Delhi’s forex reserve jump marked the third consecutive weekly increase. Foreign currency assets, the largest component, rose $7.2 billion to $581.9 billion, while gold reserves added $2.7 billion to $111.4 billion. A large contributor was foreign-currency deposit and swap scheme, which the government launched in June, and that scheme drew over $50 billion so far.
WHY IT MATTERS
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Both data points reflect the same underlying goal: deepening India’s access to foreign capital without abandoning strategic caution. Reserves above $716 billion give the RBI substantially more room to defend the rupee against external shocks. This forex reserve rebuild follows a rough stretch.
Reserves had fallen from a record $728.5 billion in late February, as Middle East-driven oil volatility pressured the rupee and forced the RBI to sell dollars.
The FDI relaxation addresses a narrower but symbolically loaded problem. Chinese investment in India totaled just $2.5 billion between 2000 and 2025, even if India’s trade deficit with China surpassed an estimated $116 billion in 2025.
After five years of blanket screening kept the Chinese capital mostly locked out, New Delhi suddenly turned around and realized that it was doing nothing to slow the flow of Chinese goods into India. It is now hoping that the 10%-stake captures some of that capital — particularly in manufacturing and tech supply chains — without reopening the door to control-seeking acquisitions.
