Did Press Note 3 relaxations help attract more FDI? | Explained
The Indian government has reported an influx of foreign direct investment following recent relaxations to Press Note 3, which previously restricted investments from countries sharing a land border with India. The policy, originally intended to prevent hostile takeovers during the pandemic, has been adjusted to allow automatic approval for minority stakes.
Why it matters
Adjusting FDI policies balances the need for economic growth against national security concerns regarding foreign influence in domestic markets.
The story so far: The government on Friday (August 21, 2026) said that India had received foreign direct investment (FDI) worth ₹4,895 over just the last few months from companies that have benefitted from recent relaxations made to India’s FDI rules.
The aim of the relaxations was precisely to ease the flow of investments that had earlier been locked out of India.
The Indian government in April 2020 issued Press Note 3, in which it amended India’s FDI policy. The existing rule at the time said that any entity of Bangladesh and Pakistan could invest in India only after securing Government approval. Press Note 3 widened this stipulation to include any country that shared a land border with India. So, this included Pakistan, China, Bangladesh, Nepal, and Bhutan.
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