PN3 regime easing to help encourage investments, build domestic capabilities: DPIIT Secy
Definition of beneficial ownership based on requests from PE, VC investors, more sectors can be added for expedited clearance later, if required
- Mar 11, 2026,
- Updated Mar 11, 2026 4:44 PM IST
The easing of norms under Press Note 3 for foreign direct investments is expected to help encourage investments and build domestic capabilities in critical component manufacturing, said Amardeep Singh Bhatia, Secretary, Department for Promotion of Industry and Internal Trade of India (DPIIT).
On March 10, the Union Cabinet approved changes in guidelines on investments from countries sharing land border with India, including expedited decisions within 60 days on proposals for investments from companies from land border sharing countries (LBCs), barring Pakistan, in specified sectors and activities of manufacturing in capital goods, electronic capital goods, electronic components, polysilicon and ingot-wafer. It had also approved a definition of beneficial ownership under which investors with non-controlling LBC Beneficial Ownership of up to 10% will be permitted under the automatic route as per the applicable sectoral caps, entry routes, attendant conditions.
Explaining the changes, DPIIT secretary said that the definition of beneficial ownership has been incorporated based on requests and representations from several investors such as venture capital and private equity funds that faced challenges in investing in India in cases where even one of their shareholders was from an LBC country.
“For even 1% shareholding, investors had to go through the PN3 route and seek approval. This amendment will bring a lot of certainty for them,” he noted, adding that for proposals with less than 10% ownership from entities from LBC countries, there will be no additional scrutiny.
For investment proposals in specified sectors from companies in LBC countries, he said that the notifications will provide full clarity on the exact sectors where the 60-day decision would be applicable. More sectors could be added later, if required, for expedited approvals, he told reporters at a briefing.
As of now, proposals for LBC investments in specified sectors and activities including capital goods manufacturing, electronic capital goods manufacturing, electronic component manufacturing, polysilicon and ingot wafers, advanced battery components, rare earth permanent magnets and rate earth processing will be processed and decided within 60 days.
Security and political clearance are not being done away with and will continue after the decision is taken within 60 days, he underlined.
The members of the Committee of Secretary led by Cabinet Secretary who would review the proposals will soon be notified, he said, adding that they will meet as per the agenda.
The easing of norms under Press Note 3 for foreign direct investments is expected to help encourage investments and build domestic capabilities in critical component manufacturing, said Amardeep Singh Bhatia, Secretary, Department for Promotion of Industry and Internal Trade of India (DPIIT).
On March 10, the Union Cabinet approved changes in guidelines on investments from countries sharing land border with India, including expedited decisions within 60 days on proposals for investments from companies from land border sharing countries (LBCs), barring Pakistan, in specified sectors and activities of manufacturing in capital goods, electronic capital goods, electronic components, polysilicon and ingot-wafer. It had also approved a definition of beneficial ownership under which investors with non-controlling LBC Beneficial Ownership of up to 10% will be permitted under the automatic route as per the applicable sectoral caps, entry routes, attendant conditions.
Explaining the changes, DPIIT secretary said that the definition of beneficial ownership has been incorporated based on requests and representations from several investors such as venture capital and private equity funds that faced challenges in investing in India in cases where even one of their shareholders was from an LBC country.
“For even 1% shareholding, investors had to go through the PN3 route and seek approval. This amendment will bring a lot of certainty for them,” he noted, adding that for proposals with less than 10% ownership from entities from LBC countries, there will be no additional scrutiny.
For investment proposals in specified sectors from companies in LBC countries, he said that the notifications will provide full clarity on the exact sectors where the 60-day decision would be applicable. More sectors could be added later, if required, for expedited approvals, he told reporters at a briefing.
As of now, proposals for LBC investments in specified sectors and activities including capital goods manufacturing, electronic capital goods manufacturing, electronic component manufacturing, polysilicon and ingot wafers, advanced battery components, rare earth permanent magnets and rate earth processing will be processed and decided within 60 days.
Security and political clearance are not being done away with and will continue after the decision is taken within 60 days, he underlined.
The members of the Committee of Secretary led by Cabinet Secretary who would review the proposals will soon be notified, he said, adding that they will meet as per the agenda.