Introduction
On 17 April 2020, the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry, Government of India, announced a significant change to India’s foreign direct investment policy (FDI Policy) through Press Note No. 3 (2020 Series) (Press Note 3). Pursuant to Press Note 3, any investment by an entity incorporated in a country sharing a land border with India, or where the beneficial owner of the investment into India is situated in or is a citizen of such a country, requires prior approval of the Government of India.
This change was introduced in the backdrop of the economic disruption caused by the COVID-19 pandemic, with the stated objective of curbing opportunistic takeovers and acquisitions of stressed Indian companies. At the same time, the measure was widely viewed as a response to growing geopolitical concerns, particularly in relation to investments originating from China, given the rising tensions along the Indo-China
