Did Press Note 3 relaxations help attract more FDI?, Pg8

Key Highlights:

• India received Foreign Direct Investment (FDI) worth ₹4,895.65 crore from 29 projects under the relaxed Press Note 3 framework by August 10, 2026.
• The relaxations, introduced in March 2026, allow entities with less than a 10% stake from land-border sharing countries to invest via the automatic route.
• Press Note 3, issued in April 2020, initially mandated government approval for FDI from countries sharing a land border with India.
• The original aim of Press Note 3 was to prevent opportunistic takeovers of Indian companies during the COVID-19 pandemic.

Detailed Insights:

• The Ministry of Commerce and Industry reported the new FDI figures, indicating the initial impact of the policy change.
• The investments span diverse sectors including information technology, artificial intelligence, manufacturing, and pharmaceuticals.
• Countries like Mauritius, the U.S., Japan, and Singapore are among the sources of these new investments.
• The relaxation aims to ease business and attract investments that were previously stalled due to minority stakes held by entities from land-border sharing nations.
• The original Press Note 3 covered countries such as China, Pakistan, Bangladesh, Nepal, and Bhutan, requiring prior government approval for their investments.
• While the recent investment amount is less than 1% of India's total FDI in 2025-26, it is seen as a positive start for the new policy.

Key Concepts Involved:

• Foreign Direct Investment (FDI): An investment made by a firm or individual in one country into business interests located in another country.
• Press Note 3: A government notification issued in April 2020, amending India's FDI policy to require prior government approval for investments from countries sharing a land border.
• Automatic Route: An FDI approval mechanism where foreign investors do not require prior approval from the government or the Reserve Bank of India (RBI).