India has approved just one FDI proposal from China worth ₹1 crore in FY26, while granting clearance to 13 proposals from Hong Kong. The data underscores the continued impact of Press Note 3 regulations.

Key Takeaways

  • Only one Chinese FDI proposal worth ₹1 crore was approved in FY25-26.
  • Hong Kong secured approval for 13 proposals totaling ₹610.42 crore.
  • Press Note 3 continues to mandate strict government scrutiny for land-border neighbors.
  • Singapore remains the leading source of approved FDI by value.

According to official data released by the Department for Promotion of Industry and Internal Trade (DPIIT), India's investment landscape shows a significant disparity between Chinese and Hong Kong-based entities. In the financial year 2025-26, the Indian government approved only a single Foreign Direct Investment (FDI) proposal from China valued at ₹1 crore, whereas 13 proposals from Hong Kong worth ₹610.42 crore were cleared.

The Role of Press Note 3

The stringent oversight is a direct consequence of Press Note 3, introduced in April 2020. This regulatory framework was designed to prevent opportunistic takeovers of Indian companies by entities from countries sharing a land border with India. Consequently, any investment from such nations requires mandatory prior government approval, regardless of the sector.

Why This Matters

BozokMedia analysis shows that while India is attempting to streamline its investment processes, it maintains a high-security threshold for its immediate neighbors. The distinction between China and Hong Kong in these figures highlights how different regulatory nuances and perceived risks affect capital inflow from the region.

The persistence of rigorous scrutiny under Press Note 3 reflects India's strategic shift towards prioritizing national security alongside economic growth.

On a broader scale, the Indian government approved 63 FDI proposals worth ₹10,292.67 crore during the April 2025 to March 2026 period. Singapore emerged as the powerhouse of investment, leading with five proposals valued at ₹3,259.88 crore, followed by the United Kingdom and Thailand.

Historical Context of Chinese Investment

Historically, China has played a marginal role in India's FDI landscape. Between April 2000 and March 2026, Chinese investments accounted for a mere 0.32% of India's total FDI equity inflows. In comparison, Hong Kong contributed 0.62%, positioning it higher in the hierarchy of investing nations despite the shared geopolitical complexities.

Did You Know?: India shares land borders with seven countries: China, Bangladesh, Pakistan, Bhutan, Nepal, Myanmar, and Afghanistan, all of which fall under enhanced scrutiny norms.

Frequently Asked Questions

1. What is the purpose of Press Note 3?
It was implemented to ensure that investments from land-bordering countries undergo government vetting to prevent hostile or opportunistic acquisitions.

2. Which country is the largest investor in India currently?
Based on the latest data, Singapore is the leading source of approved FDI proposals by total value.