The government has identified seven key manufacturing sectors for faster approval of foreign direct investment (FDI) proposals from China, as part of an effort to streamline investment clearance under the revised Press Note 3 framework, a senior official said. The sectors prioritised for expedited clearance include capital goods, electronic capital goods, electronic components, polysilicon and ingot wafers, advanced battery components, rare earth permanent magnets, and rare earth processing. Officials said these areas are considered critical for India’s manufacturing ecosystem, particularly in emerging technologies and supply chain security.

Capital goods cover machinery, heavy equipment, and industrial accessories used in manufacturing, while electronic capital goods include specialised equipment used in producing items such as lithium-ion batteries and mobile phones. Electronic components include display modules, camera modules, printed circuit boards, and mobile phone enclosures. Polysilicon, a key raw material for semiconductor manufacturing, is used to produce silicon wafers, which are further processed into ingots.

The move comes under an amended version of Press Note 3, which governs FDI from countries sharing a land border with India. The revised framework introduces an expedited approval mechanism under which eligible proposals in specified sectors are expected to be cleared within 60 days. The policy applies to what are classified as land-border country (LBC) investments and was recently eased to encourage inflows into strategic sectors while maintaining regulatory oversight. According to officials, around 600 investment proposals from China are currently awaiting approval with the Department for Promotion of Industry and Internal Trade (DPIIT). The revised mechanism is expected to help reduce this backlog and facilitate structured inflows into priority manufacturing segments.

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At the same time, the government has emphasised that all investments will continue to undergo strict scrutiny. Officials said India remains open to foreign investment, including from China, but will proceed with caution, ensuring national security and strategic interests are protected. “We are willing to facilitate investments, but only after due diligence. Safety and security remain paramount,” an official said.

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