India's FDI Policy Architecture
Automatic vs. Government Route
India's FDI policy operates through two routes: the Automatic Route (no prior approval needed — just post-facto RBI notification) and the Government Route (prior approval required from the competent authority, currently DPIIT with inter-ministerial consultation). Sector-specific caps exist: e.g., defence (74% automatic, up to 100% via government route), media (26–49%), banking (74%). The government route is typically used for sensitive sectors or geopolitically complex investors. The 2020 Press Note 3 effectively moved all investments from land-border countries from automatic to government route irrespective of sector.
- Automatic Route: investor only needs to notify the RBI within 30 days of receiving funds
- Government Route: prior approval from DPIIT/competent authority required
- Press Note 3 (2020) shifted ALL land-border country investments to government route
- 2026 amendment: global entities with ≤10% non-controlling stake from land-border investors can use automatic route — but entities directly registered in border countries cannot
- Fast-track: 60-day processing window for approvals in strategic sectors (rare earth, batteries, capital goods, etc.)
● Tracked since March 11, 2026 · last seen May 02, 2026 · updates as the daily brief publishes