The decision to permit foreign companies with up to 10 per cent Chinese ownership to invest in India through the automatic route, will be announced soon under Foreign Exchange Management Act (FEMA), according to a senior government official.

The revised framework will take effect upon notification from the Department of Economic Affairs (DEA).

In March, the Union Cabinet approved amendments in the press note (PN) 3 of 2020 of the DPIIT.

As per the note, 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.

Additionally, the government has also decided that FDI proposals in specific sectors or activities of manufacturing in capital goods, electronic capital goods, electronic components, polysilicon and ingot-wafer, or any other sector or activity added by the Cabinet Secretary’s committee of secretaries will be processed within 60 days.

Jai Prakash Shivahare, Joint Secretary, DPIIT, said, “The DEA will have to issue the notification under FEMA (Foreign Exchange Management Act). It will be notified very soon. It requires a lot of fine-tuning.”

He said the DPIIT is trying to find subsectors whose applications will be handled within 60 days. Also, it is examining previous PN3 applications that do not require government clearance.

Those applicants may just have to be informed and proceed with their investments. Prior to the March amendment, any enterprise that had shareholders from nations that shared a land border with India was required to apply for government clearance before making any investments in any Indian industry.

Earlier, on Thursday, while addressing the media, Amardeep Singh Bhatia, Secretary, DPIIT, said India’s investment momentum is a direct outcome of policy clarity, institutional commitment, and the trust global investors place in our systems.

“The USD 6.1 billion grounded by Invest India in FY 2025-26 reflects the strength of India’s regulatory environment and the depth of its economic transformation. DPIIT remains committed to further simplifying processes and ensuring that investments translate into jobs, innovation, and long-term value,” Bhatia had said.