India to Relax Foreign Direct Investment Rules for Chinese-Owned Companies

New Delhi: The government is all set to liberalise foreign direct investment (FDI) rules in India for foreign companies with up to 10 per cent Chinese stake under the Foreign Exchange Management Act and will issue a notification soon. Earlier in March, the Union Cabinet had approved amendments to the controversial Press Note-III. According to these amendments, foreign companies with up to 10 per cent Chinese ownership will be able to invest under the automatic route in various sectors in India. However, the relaxed norms will not apply to companies registered in China, Hong Kong or other countries with land borders with India. The government has also decided to clear FDI proposals in certain sectors such as capital goods, electronic capital goods, electronic components, polysilicon within 60 days. The Department for Promotion of Industry and Internal Trade has issued a notification regarding these amendments, but the Department of Economic Affairs has not notified it. The Department of Economic Affairs is required to issue a notification under FEMA. DPIIT Joint Secretary Jay Prakash said that the department was in the process of preparing the list of FDI sub-sectors in 60 days in April-February.