Up to 10% Chinese stake rule unlocks Rs 4,896-cr FDI pipeline

New Delhi: The decision to allow overseas companies with up to 10 per cent Chinese shareholding to invest in India under the automatic route has begun to yield results, with 29 FDI proposals worth Rs 4,895.65 crore reported so far, an official said.

The investments span sectors including information technology, artificial intelligence, information and communication, manufacturing, pharmaceuticals, data centres and transport services.

The proposals have been reported by investors or entities based in jurisdictions including Mauritius, the US, Korea, Japan, Singapore, Luxembourg and the Cayman Islands.

The Finance Ministry notified the changes under FEMA on May 1, significantly easing the process for companies with limited Chinese or Hong Kong shareholding.

Under the revised framework, foreign companies having Chinese or Hong Kong shareholding of up to 10 per cent can invest in sectors where FDI is permitted under the automatic route, subject to applicable sectoral conditions.

The government said the move removes the requirement of prior approval in such cases, allowing investors to proceed through the automatic route while complying with reporting requirements. The reform is expected to provide greater certainty to investors, reduce transaction time and improve ease of doing business, the official said.

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The Hans India