India blocks automatic FDI route for neighbours to curb hostile takeovers

Until now, Chinese investments were automatically allowed, similar to those from other nations, in all but 16 sectors, such as telecom, defence, and national security.

In a major change to its foreign direct investment (FDI) policy, India on Saturday mandated that all the investments from neighbouring countries, including China, would now require government approval. This effectively closes the “automatic route” for these nations through which an increasing number of foreign firms and individuals had begun to invest of late.
 

The sudden move has been attributed to the rising possibility of “opportunistic takeovers” of Indian companies by those in neighbouring nations, as the ongoing Covid-19 pandemic wreaks havoc on the domestic economy.

Until now, Chinese investments were automatically allowed, similar to those from other nations,