On Saturday, the Indian government amended the Foreign Exchange Management Act (FEMA) rules, allowing foreign entities with up to 10% Chinese ownership to invest in India through the automatic route. This decision follows a Cabinet approval in March to facilitate foreign investments while ensuring national security. The Department for Promotion of Industry and Internal Trade (DPIIT) has issued the relevant changes, which will take immediate effect. Previously, FDI from countries sharing land borders with India, including China, was restricted to curb opportunistic takeovers during the COVID-19 pandemic. The new rules signify a potential easing of tensions between India and China, as they now allow smaller stakes from Chinese investors without prior government approval. However, entities with beneficial ownership exceeding 10% will still need to seek clearance. This regulatory shift aims to enhance FDI inflows while balancing security concerns amid ongoing geopolitical challenges.