At a time when there are growing concerns that China is using its financial might to buy distressed assets across the globe, the Indian government seems to had added a bureaucratic layer of control over China's investments and acquisitions in India; this layer will act as a restriction, since previously, such investments were possible via "the automatic route", and largely unimpeded. Does it target China? The Press Note doesn't specifically mention China, but refers to investments from countries with land borders with India, which means, given China's size and investments in India, that it targets China. What has changed? The Press Note 3 (2020 Series) from India's Department for Promotion of Industry and Internal Trade, FDI Policy Section, amends India's FDI Policy to bring about two key changes: Investment: An entity in a country which shares a land border with India, or where the beneficial owner of an investment in India is situated in or is a citizen of such a country, can only invest in India via approvals from the Indian government. Acquisition: In the event of a transfer of ownership of any existing of future FDI in an entity in India, directly or indirectly, will also require government approval. The Pakistan clause has been retained: a citizen of Pakistan or an entity incorporated in Pakistan cannot invest in India in defence, space, atomic energy and sectors/activities prohibited for foreign investment. Previously: A Bangladesh clause: A citizen of Bangladesh or an entity incorporated in Bangladesh can invest only under…
