Pakistan-China will openly invest in India! After Galwan, Modi government made a big change

New Delhi: The Indian government has made major changes in the FDI rules for neighboring countries. Now companies from all neighboring countries including China will not need government approval to invest in India. This decision was taken in the Union Cabinet meeting chaired by Prime Minister Narendra Modi on March 10, 2026. This can open new avenues of investment and benefit the economy.

What were the old rules?

After the Galwan Valley conflict in 2020, India issued ‘Press Note 3’. Under this, any investment coming from countries bordering India (such as China, Pakistan, Bangladesh, Nepal, Bhutan, Myanmar and Afghanistan) had to take prior permission from the government.

This rule was made to protect security and national interests. This made it difficult for companies like China to invest in India.

Foreign companies will invest without approval

Now foreign companies with shareholders from these countries will be able to invest in different sectors without mandatory approval. This change will make the investment process easier. This can accelerate trade and industry. However, caution can still be taken in security sensitive areas.

China’s share in FDI is still low

Despite this change, China’s contribution to the total FDI in India is very less. From April 2000 to December 2025, only US $ 2.51 billion has come from China, which is only 0.32% of the total FDI. China is at 23rd place in the list of investors. Due to the tension after 2020, many Chinese apps like TikTok and WeChat were also banned.

Strong relationship continues in business

Despite low FDI, India-China trade has increased rapidly. China remains India’s second largest trading partner. In 2024-25, imports from China increased to $113.45 billion, while exports decreased to $14.25 billion. Due to this, the trade deficit reached 99.2 billion dollars.

In the financial year 2025-26, exports increased by 38.37% to $ 15.88 billion, while imports increased by 13.82% to $ 108.18 billion. The deficit remained at $92.3 billion. This change is a step towards strengthening economic relations. With this, other neighboring countries will also get better investment opportunities. It is expected that this will give new impetus to employment and development in India.