India relaxed FDI rules for bordering nations, including China, removing approval requirements in most sectors.

India has eased foreign direct investment rules for countries sharing land borders, including China, following a cabinet decision by Prime Minister Narendra Modi. The change modifies Press Note 3 of 2020, removing mandatory government approval for investments from these nations across most sectors. Despite China’s minimal FDI presence—just 0.32% of India’s total inflows—bilateral trade has grown, with India’s trade deficit with China reaching $99.2 billion in 2024–25. Exports to China rose 38.37% in the first ten months of 2025–26, though imports remained high. The move signals a cautious economic outreach amid ongoing strategic tensions.