India considers easing regulations on investment from neighbors

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India is considering a plan to allow up to 26 percent foreign direct investment from countries with which it shares a land border, including China, without government scrutiny for some sectors, the Economic Times reported on Tuesday, citing government officials

In April, India stepped up scrutiny of investments from companies based in neighboring countries, in what is widely seen as a move to stave off takeovers by Chinese firms during the coronavirus outbreak.

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The Indian government’s April 17 notification had said investments from an entity in a country that shares a land border with India will require government approval, meaning they can not go through a so-called automatic route.

The Economic Times report said that a panel of top government officials was discussing various options on easing rules for investment from neighbors and a decision is likely soon.

The commerce and industry ministry did not immediately reply to an email from Reuters seeking comment.

Tensions between India and China remain high with tens of thousands of troops deployed along the remote Himalayan border, even as the two countries are formulating a plan to end months of military standoff.

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