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ARTICLE · 07 APRIL 2026

India’s Press Note 3 Framework Revisited: Investments From Land Bordering Countries

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Managing foreign investment has always been a balancing act for India, as it seeks to encourage capital inflows on the one hand while protecting national interest on the other.

IndiaGovernment, Public Sector
Vikram Bhargava
Vikram Bhargava
Ashish Dutta
Ashish Dutta
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Introduction

Managing foreign investment has always been a balancing act for India, as it seeks to encourage capital inflows on the one hand while protecting national interest on the other. Foreign investment into India is governed by the Foreign Direct Investment (“FDI”) framework, which primarily includes the Consolidated FDI Policy and the Foreign Exchange Management Act, 1999 read with the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019.

On 10 March 2026, the Government of India issued a Press Release (“Press Release”) stating that the Union Cabinet has approved amendments to the FDI framework with respect to investments from countries sharing land border with India (“LBCs”). The proposed amendments aim to unlock greater FDI inflows from global funds as well as address certain ambiguities that arose from the rules laid down by Press Note No. 3 (2020 Series) dated 17 April 2020 (“PN3”). In pursuance of this, the Department for Promotion of Industry and Internal

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