The government on Tuesday eased foreign direct investment (FDI) rules for all countries sharing borders with India, including China. Sources said that the amendment in this regard has been made in Press Note-3 of 2020. This decision was taken in the Union Cabinet meeting chaired by Prime Minister Narendra Modi. Under this press note, foreign companies with shareholders from countries sharing a land border need mandatory approval from the government to invest in any sector in India, PTI sources said.
China’s share in total FDI equity
The countries sharing land borders with India are China, Bangladesh, Pakistan, Bhutan, Nepal, Myanmar, and Afghanistan. China’s share in total FDI equity inflows into India from April 2000 to December 2025 is only 0.32 per cent (USD 2.51 billion), and it ranks 23rd. Relations between the two countries soured after the fierce clash in the Galwan Valley in June 2020. Following this, India banned more than 200 Chinese mobile apps, such as TikTok, WeChat, and Alibaba’s UC Browser. Although India has received very little foreign direct investment from China, bilateral trade between the two countries has increased manifold.
Exports to China fall, imports rise
China has emerged as India’s second largest trading partner. India’s exports to China declined by 14.5 per cent to USD14.25 billion in 2024-25, compared to $16.66 billion in 2023-24. However, imports increased by 11.52 percent to USD113.45 billion in 2024-25, compared to USD101.73 billion in 2023-24. The trade deficit widened from USD85 billion in 2023-24 to USD99.2 billion in 2024-25. India’s exports to China increased by 38.37 per cent to USD15.88 billion during April-January of the current fiscal year, while imports increased by 13.82 per cent to USD108.18 billion, leaving a trade deficit of USD92.3 billion.
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