Big FDI rule overhaul in works; govt may ease approvals for subsidiaries, large investments: Sources

The government is preparing to ease foreign direct investment (FDI) rules to attract more overseas investment into India, sources told CNBC Awaaz.

A draft Cabinet note proposing changes to FDI regulations has been prepared and could receive Cabinet approval soon, the sources said.

Under the proposed changes, the government may remove the requirement for fresh approval for FDI routed through subsidiaries or downstream companies if the parent company has already secured the necessary approval.

The proposal seeks to ease conditions for FDI in downstream companies, with a parent company that has obtained approval for foreign investment potentially not required to seek approval again for investments made through its subsidiaries.

The government is also considering removing the requirement for Cabinet approval for certain FDI proposals above ₹5,000 crore.

Under the proposal, FDI investments of up to ₹15,000 crore could be cleared without approval from the Cabinet Committee on Economic Affairs (CCEA).

A draft Cabinet note on easing FDI-related rules has been prepared, with the proposal expected to be taken up for approval soon.

FDI inflows rise 18% in FY26

The proposed changes come as foreign direct investment into India continues to grow.

FDI equity inflows into India increased 18% to $58.84 billion in the financial year 2025-26. Investments from the United States more than doubled compared with the previous financial year.

A draft Cabinet note on easing FDI-related rules has been prepared, with the proposal expected to be taken up for approval soon.

Also read: What India’s headline FDI won't tell you and where we need to go