India's FDI Policy Framework
Automatic Route vs. Government Route
India's foreign investment framework is governed by the Foreign Exchange Management Act, 1999 (FEMA) and the Consolidated FDI Policy issued by DPIIT. There are two entry routes: (1) the Automatic Route, where no prior government or RBI approval is needed — the investor only needs to file post-facto intimation to the RBI; and (2) the Government Route (approval route), where prior approval from the competent authority (the FIPB was abolished in 2017; now DPIIT or respective ministry) is mandatory. Sectoral caps additionally apply — some sectors allow up to 100% FDI, while others have limits (e.g., defence: up to 74% under automatic, beyond requires government approval).
- Governing law: FEMA, 1999 (Foreign Exchange Management Act); Consolidated FDI Policy (updated periodically by DPIIT)
- Automatic Route: No prior approval; investor files intimation with RBI within 30 days of inward remittance
- Government Route: Prior approval from DPIIT (for most sectors) or relevant ministry; application via Foreign Investment Facilitation Portal (FIFP)
- FIPB (Foreign Investment Promotion Board) abolished: May 2017 — decentralised approval to individual ministries
- Key sectors with 100% FDI under automatic route: Greenfield pharma, electronics manufacturing, IT, logistics
- Key sectors requiring government approval regardless of country: Defence (beyond 74%), multi-brand retail, media (broadcasting)
- Post-2026 amendment: Land-border country investments below a specified ownership threshold may use the automatic route; above the threshold still require government approval
● Tracked since March 10, 2026 · last seen August 09, 2026 · updates as the daily brief publishes