India's FDI Landscape: A Closer Look at Chinese and Hong Kong Investments

In the latest financial year, India approved a mere one Chinese FDI proposal while greenlighting 13 from Hong Kong. This article delves into the implications of these approvals, the historical context of investments from neighboring countries, and the recent changes in FDI regulations. With Singapore leading the way in FDI value, the article also highlights the government's efforts to regulate investments from land border nations to prevent opportunistic takeovers during the pandemic. Discover the dynamics of India's FDI landscape and what it means for future investments.

By Narendra Chaudhary Aug 2, 2026, 19:50 IST

Overview of Recent FDI Approvals

New Delhi: In the previous financial year, India sanctioned only one foreign direct investment (FDI) proposal from China, valued at Rs 1 crore, while approving 13 applications from Hong Kong totaling Rs 610.42 crore, as per official statistics.

These approvals are significant because investments from nations sharing a land border with India have required prior government consent since April 2020, as outlined in Press Note 3 by the Department for Promotion of Industry and Internal Trade (DPIIT).

This regulation was implemented to prevent opportunistic acquisitions of Indian firms during the COVID-19 crisis.

In total, the government has authorized 63 FDI proposals amounting to Rs 10,292.67 crore (approximately USD 1.18 billion) from April 2025 to March 2026, according to DPIIT data.

Singapore has emerged as the leading source of approved FDI in terms of value, with five proposals worth Rs 3,259.88 crore (USD 382.52 million) receiving the green light.

Following Singapore, the UK had five proposals approved, amounting to Rs 2,477.67 crore (USD 283 million), while Thailand secured approval for two proposals valued at Rs 1,600 crore (around USD 180 million).

In March, the government relaxed the conditions of Press Note 3 from April 2020, allowing investors from land border countries with non-controlling beneficial ownership of up to 10 percent to proceed under the automatic route, subject to relevant sectoral caps and conditions.

However, it was made clear that these relaxed FDI regulations do not extend to entities registered in China, Hong Kong, or other neighboring countries.

The nations sharing land borders with India include China, Bangladesh, Pakistan, Bhutan, Nepal, Myanmar, and Afghanistan.

Historically, China has not been a significant source of direct investments in India, ranking 23rd and contributing only 0.32 percent of total FDI equity inflows from April 2000 to March 2026, totaling USD 2.51 billion (Rs 16,162.25 crore).

In contrast, Hong Kong ranks 15th, accounting for 0.62 percent (USD 4.91 billion or Rs 31,220.30 crore) of total FDI equity inflows during the same period.

Similar to the fiscal year 2025-26, India approved just one Chinese FDI proposal in 2024-25, valued at Rs 28.71 crore (USD 3.44 million). That year, a total of 82 proposals were sanctioned under the government route, with an overall investment of Rs 39,758 crore (USD 4.72 billion).

From Hong Kong, 11 proposals worth Rs 1,225.28 crore (USD 146.51 million) were approved in 2024-25.