India Refines Its FDI Security Framework With New Ownership Threshold And Approval Timeline

1. Introduction

After the Union Cabinet approved changes to the rules governing investments from nations that share a land border with India on March 10, 2026, India’s foreign investment framework went through a significant recalibration.¹ These changes create a fixed schedule for the approval of some foreign investments that have previously been subject to prolonged regulatory review and provide more clarity on the determination of beneficial ownership.

The structure established under Press Note 3 (2020), which needed government clearance for investments coming from neighbouring countries or where the beneficial owner was located in such jurisdictions, is modified by the revisions. In order to stop opportunistic acquisitions of financially troubled Indian enterprises, the regulation was implemented during the COVID-19 pandemic.