India only approved one FDI proposal from China worth ₹1 crore in this financial year 2025-26 and is still very cautious about investments from countries that share a land border with India. According to data from the Department for Promotion of Industry and Internal Trade (DPIIT), the government approved 63 FDI proposals worth ₹10,292.67 crore (around $1.18 billion) from April 2025 to March 2026.
Only one proposal from mainland China was approved, and 13 proposals from Hong Kong were also approved in the same period, reflecting the government's case-by-case examination of foreign investment.
The figures highlight India's existing FDI screening policy which took effect in 2020 under which foreign companies from countries sharing a land border with India need to apply for official approval prior to investment and not just in an automatic manner. The policy was introduced to prevent opportunistic acquisition of Indian companies and has been a key part of India's foreign investment policy since then. The proposals from China have been analyzed further and cleared for approval.
While the number of approvals from mainland China was still very low in FY26, the overall amount of FDI proposals approved by the government shows that investor interest continues to exist in various sectors of the Indian economy. The total amount of investment approved so far is well over ₹10,000 crore and will help in the growth of the business sector as well as job generation, technology transfer, and industrial growth of various industries.
Hong Kong had a higher number of approved proposals than mainland China. 13 of these investments were approved by the government. However, each proposal is evaluated separately according to the regulatory requirements, ownership structures, national security considerations, sectoral guidelines, and compliance with India's FDI policy. The approval of Hong Kong proposals does not mean that all the proposals are treated equally in the context of all the applications, and each investment is evaluated on its own.
India is still one of the most promising destinations for foreign investment due to its large consumer market, digital economy, manufacturing initiatives, skilled workforce, and infrastructure development. Make in India, Digital India, the Production Linked Incentive (PLI) Scheme, and other efforts by the government to make business easier for international companies to operate there have made it easier for the world's companies to invest.
Foreign Direct Investment is crucial to the development of the economy through long-term capital, advanced technology, management skills, and global market access. FDI also stimulates job creation, exports, innovation, and domestic supply chains. As India looks to become a global manufacturing and investment center, attracting quality foreign investment continues to be an important policy objective.
At the same time, the government has said that economic openness must be balanced with national security. The mechanism for approving investment from neighboring countries allows authorities to take into account ownership patterns, beneficial control, strategic importance, and sensitive sector factors before granting permission. The government has said the policy is intended to ensure transparency and protect important sectors while still being open to genuine long-term investors.
As a result, global geopolitical developments, supply chain diversification, and investment strategies continue to influence cross-border capital flows, business analysts say. And because companies around the world are increasingly looking at India as a viable manufacturing and investment destination with policy incentives and good infrastructure, the overall flows of FDI have remained a key indicator of investor confidence in the Indian economy.
Industry experts also believe that maintaining a transparent and predictable regulatory framework is essential for sustaining investor confidence. More timely and transparent approval of applications can accelerate the process of application processing, and policy clarity and regulatory consistency can also make India a better global investment destination while fulfilling national interests.
The FY26 approval data from India shows both India's openness to foreign capital and the continuous role it plays in strategic oversight of investment from foreign countries. Although only one Chinese proposal worth ₹1 crore received approval, 63 proposals valued at more than ₹10,292 crore are in place across sectors. In the future, foreign investors are expected to continue to see India as a key growth market, and the government will balance economic growth with national security objectives.
