About 200 investment proposals from China are awaiting security clearance from the Ministry of House Affairs (MHA) after brand-new rules were informed in April, making previous government approval mandatory for foreign direct financial investments (FDI) from countries which share a land border with India.
As FDI is allowed in non-critical sectors through the automated path, earlier these proposals would have been cleared without the MHA’s nod. Previous government approval or security clearance from MHA was needed for financial investments in critical sectors such as defence, media, telecommunication, satellites, private security agencies, civil air travel and mining and any investments from Pakistan and Bangladesh.
The Department for Promo of Market and Internal Trade (DPIIT) informed the brand-new FDI policy on April 18, which said, “… an entity of a country, which shares land border with India or where the useful owner of a financial investment into India is situated in or is a citizen of any such country, can invest only under the Government path.”
The revised FDI policy, a press declaration from DPIIT stated, is aimed at “suppressing opportunistic takeovers/acquisitions o