The Cabinet of India decided on Tuesday to ease strict investment approval requirements for neighboring countries such as Nepal. Previously, under the April 2020 Press Note 3 regulation, nations sharing land borders with India had to obtain government approval for Foreign Direct Investment (FDI) to prevent opportunistic acquisitions during the pandemic. The revised rule now allows investors from these countries to invest up to 10 percent through the automatic route in non-strategic sectors. Investment proposals in designated areas such as electronics and capital goods will be processed within 60 days. However, majority ownership and control of recipient companies must remain with resident Indian citizens or Indian-controlled firms.
