It’s been more than five years since the government altered its stance on investments from China by changing the rules in Press Note 3 (PN3). However, the global economic and political environment has changed dramatically since then, and perhaps, it’s time to review the regulation and even consider scrapping it.

It was in April 2020, just ahead of the face-offs and skirmishes between the Chinese and Indian troops along the Sino-Indian border, that the government decided to bar Chinese foreign direct investment ( FDI ) from coming in through the automatic route.

Under PN3, any investment into India from a country sharing a land border—or where the beneficial owner is from such a country—must seek prior government approval. Though China wasn’t specifically named, the target was obvious

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