{"id":911786,"date":"2026-06-10T15:18:19","date_gmt":"2026-06-10T20:18:19","guid":{"rendered":"https:\/\/newsycanuse.com\/index.php\/2026\/06\/10\/finance-ministry-notifies-fdi-easing-for-overseas-companies-with-up-to-10-chinese-stake-under-fema\/"},"modified":"2026-06-10T15:18:19","modified_gmt":"2026-06-10T20:18:19","slug":"finance-ministry-notifies-fdi-easing-for-overseas-companies-with-up-to-10-chinese-stake-under-fema","status":"publish","type":"post","link":"https:\/\/newsycanuse.com\/index.php\/2026\/06\/10\/finance-ministry-notifies-fdi-easing-for-overseas-companies-with-up-to-10-chinese-stake-under-fema\/","title":{"rendered":"Finance Ministry notifies FDI easing for overseas companies with up to 10% Chinese stake under FEMA"},"content":{"rendered":"

Home<\/a><\/span>Business News<\/a><\/span>Finance News<\/a><\/span>Finance Ministry notifies FDI easing for overseas companies with up to 10% Chinese stake under FEMA<\/span><\/p>\n

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As per the amendments, foreign companies having a Chinese\/Hong Kong shareholding of up to 10 per cent will be eligible to invest in India in sectors where FDI is permitted under the automatic route subject to sectoral conditions.<\/h2>\n<\/p>\n
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By PTI\u00a0<\/span>May 3, 2026, 1:17:22 AM IST (Published)<\/span><\/span><\/p>\n<\/div>\n

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\"Finance<\/p>\n

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The Finance Ministry has notified a decision to allow overseas companies with Chinese shareholding of up to 10 per cent to invest in India under the automatic route under FEMA, according to a notification. In March, the Union Cabinet approved amendments in the press note (PN) 3 of 2020 of the DPIIT.<\/p>\n

\nAs per the amendments, foreign companies having a Chinese\/Hong Kong shareholding of up to 10 per cent will be eligible to invest in India in sectors where FDI is permitted under the automatic route subject to sectoral conditions.<\/p>\n

\nHowever, these relaxed FDI rules will not apply to entities registered in China or Hong Kong or other countries sharing land borders with India.<\/p>\n

\nEarlier, foreign firms with shareholders from these land border nations owning even a single share had to seek mandatory approval to invest in India in any sector.<\/p>\n

\nNow, these restrictions will apply only to beneficial owners.<\/p>\n

\nAfter the Cabinet approval, the Department for Promotion of Industry and Internal Trade (DPIIT) notified it in March through a press note 2 (2026 series). The DPIIT issues FDI notifications through press notes.<\/p>\n

\nAccording to a notification of the Department of Economic Affairs (DEA), the expression “beneficial owner” shall have the same meaning as assigned to it in clause (fa) of sub- section (1) of section 2 of the Prevention of Money-laundering Act, 2002 (15 of 2003), and shall be determined as per the criteria specified under a provision of the Prevention of Money-laundering (Maintenance of Records) Rules, 2005.<\/p>\n

\nAs per a PMLA rule, controlling ownership interest means ownership of or entitlement to more than ten per cent of shares or capital or profits of the company.<\/p>\n

\nThe DEA’s notification subject is “amendment to the Foreign Exchange Management (Non debt Instruments) Rules 2019 consequent to DPIIT Press Note No 2 (2026 Series)”.<\/p>\n

\nIn order to curb opportunistic takeovers\/acquisitions of Indian companies due to the COVID-19 pandemic, the government had amended the FDI policy through Press Note 3 (2020) on April 17, 2020.<\/p>\n

\nThe notification also said that a multilateral bank or fund, of which India is a member, will not be treated as an entity of a particular country, nor shall any country be treated as the beneficial owner of the investments of such bank or fund in India.<\/p>\n

\nHowever, the investments into India from an investor entity having any direct or indirect ownership by a citizen or an entity of a country sharing land border with India; and not requiring prior government approval under the provisions of this provision, will be subject to reporting requirements specified by the Reserve Bank, it added.<\/p>\n

\nChina stands at the 23rd position with only 0.32 per cent share (USD 2.51 billion) in the total FDI equity inflow reported in India from April 2000 to December 2025.<\/p>\n<\/div>\n<\/div>\n<\/section>\n

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Home Business News Finance News Finance Ministry notifies FDI easing for overseas companies with up to 10% Chinese stake under FEMA As per the amendments, foreign companies having a Chinese\/Hong Kong shareholding of up to 10 per cent will be eligible to invest in India in sectors where FDI is permitted under the automatic route<\/p>\n","protected":false},"author":1,"featured_media":911787,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[26943,29019],"tags":[5247,10985],"class_list":["post-911786","post","type-post","status-publish","format-standard","has-post-thumbnail","category-finance","category-ministry","tag-finance","tag-ministry"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/911786","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/comments?post=911786"}],"version-history":[{"count":0,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/911786\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media\/911787"}],"wp:attachment":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media?parent=911786"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/categories?post=911786"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/tags?post=911786"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}