India eases FDI rules for Chinese investments, but conditions apply

After years of tight restrictions, India is cautiously reopening the door to foreign investments from neighbouring countries, especially China.

At a cabinet meeting chaired by Prime Minister Narendra Modi, the government decided to relax the Press Note 3 rules introduced during the pandemic. Under the revised framework, investors from countries sharing a land border with India can now invest up to 10% in Indian companies without undergoing detailed security screening, provided they do not seek management control or board representation.

Why the shift now? The PN3 regime had effectively stalled several deals, leaving sectors like manufacturing, technology and startups short of capital. Policymakers appear keen to revive investment flows while still keeping strategic sectors guarded.

China’s direct investment in India remains relatively modest, about $2.5 billion since 2000, yet trade ties have expanded rapidly, with India’s trade deficit crossing $99 billion in FY25.

The new rules aim to welcome capital, but retain control. With India targeting $100 billion in annual FDI inflows, can economic pragmatism coexist with geopolitical caution? Read the full report by Dhirendra Kumar and Manas Pimpalkhare.

THE MAIN STUFF

Cooking gas confusion: A government order meant to protect household cooking gas has stirred unexpected anxiety in India’s restaurant sector.

As tensions in West Asia disrupt global fuel supplies, the Centre directed refiners to prioritise propane and butane for domestic LPG cylinders. But the wording has triggered confusion.

Some distributors reportedly began holding back commercial LPG cylinders used by restaurants, fearing supply restrictions. For the 80-90% restaurants that depend heavily on LPG—even short disruptions can halt kitchens.

Crude’s war premium: When the US and Israel struck Iran on 28 February 2026, markets barely flinched. Oil rose, but nothing dramatic. Just another Middle East flare-up, investors assumed. Then, reality hit.

As Iran pushed back and threats to the Strait of Hormuz—through which 20% of global oil flows—grew, crude prices surged past $100 a barrel and global equities slid. In just nine days, oil jumped 39%, a sharper spike than during the Ukraine war in 2022. Stocks haven’t been spared either. India’s Sensex has slipped about 5%, reflecting growing anxiety. Read more.

Gas first for homes: As energy tensions rise in West Asia, India is tightening its gas priorities, and households are at the top of the list. With supplies disrupted after attacks on key LNG facilities and shipping halted through the Strait of Hormuz, India has invoked the Essential Commodities Act to ensure full gas supply for piped domestic connections and CNG vehicles.

Other sectors will have to adjust. Industries will receive 80% of their usual supply, fertiliser plants 70%, while refineries and petrochemical companies face cuts of up to 35%. Why the urgency? India imports over half its natural gas, with Qatar alone supplying a large share.

Iran war jitters hit gulf hiring: The West Asia conflict is beginning to show up in India Inc.’s hiring plans. Companies with exposure to Dubai, Saudi Arabia and Qatar are slowing recruitment and reviewing expansion strategies as uncertainty rises. Executive search firms say senior-level hiring is being paused, while sectors such as energy, construction, logistics and real estate may even see bonuses trimmed.

Why the caution? Oil prices have spiked and the rupee has weakened, making companies reassess regional risks. Interestingly, the shift may create opportunities at home. Some firms are redirecting hiring to India, and professionals based in the Gulf are exploring a move back. Read more.

AI bypasses marketplaces: For years, platforms like IndiaMART helped small businesses get discovered online. A buyer searched, scrolled listings, and called suppliers. Simple. Reliable. But AI may be quietly rewriting that journey. Today, tools like ChatGPT often deliver direct answers, sometimes linking straight to a seller’s website, bypassing the marketplace entirely.

For traders who relied on IndiaMART as their only digital storefront, the impact is real. IndiaMART has even taken OpenAI to court, arguing that AI responses are excluding its listings and hurting millions of MSME suppliers who depend on the platform. Read on.

NEWS IN NUMBERS

$88 million: The worldwide opening weekend collections for Pixar’s ‘Hoppers’, the strongest launch for an original animated film since ‘Coco’, with $46 million from North American markets.

300,000: The number of Jewish residents in Jerusalem eligible for personal firearms licences after a blanket approval by Israel’s national security minister amid the war with Iran.

₹3,000 crore: The size of Truhome Finance’s planned IPO, split equally between a ₹1,500 crore fresh equity issue and a ₹1,500 crore offer for sale to bolster capital and future lending capacity.

55 million: The number of iPhones Apple assembled in India in 2025, a 53% jump from 36 million a year earlier, taking India’s share to about 25% of global iPhone output.

₹25,978 crore: The net inflows into equity mutual funds in February, up 8% from January, as investor interest stayed strong amid the interim India-US trade deal.

132.5 million: The number of e-way bills raised in February, down 3.1% from January’s 136.8 million yet still the third-highest ever, signalling strong goods movement across the country.

$93.4 billion: Saudi Aramco’s net profit for 2025—down 12% from $106.2 billion in 2024—as weaker revenues, US tariffs, and economic headwinds hit the oil giant’s earnings.

AROUND THE WORLD

• China has spent years preparing for the Iran oil crisis
• Anthropic’s standoff with the Pentagon shakes up AI talent race
• The final days of Iranian Navy crew before US torpedoed their ship
• US and Iran predicted a very different war than the one being waged
• The Shahed drone has been Iran’s most effective weapon. What to know about it.

CHART OF THE DAY

India, with 308 billionaires, has retained the third rank globally on the latest Hurun Global Rich List. City-wise, Mumbai and Delhi have slipped in rankings, while Bengaluru has moved up.

LOUNGE RECOMMENDS

Young adults are developing ‘tech neck’ earlier than ever: It usually announces itself at inconvenient moments—half-way through a work call, while tying your hair, when you turn your head to reverse the car and feel a dull pull you just can’t quite shake off.

Neck stiffness used to feel like an adult problem, something you earned after decades of bad posture or long commutes.

Now, physiotherapists and orthopaedic clinics in metro cities are seeing it show up far earlier—adults in their early 20s; professionals at their first jobs—bodies that work just fine otherwise are all going through the so-called “tech neck”. Read more.

WHAT THE FACT

When covid became a global pandemic: On this day in 2020, the World Health Organization officially declared the Covid-19 outbreak a global pandemic.

The announcement marked a turning point, as the virus had already spread rapidly across continents, forcing governments worldwide to impose lockdowns, restrict travel and mobilise healthcare systems. The declaration underscored the scale of the crisis and triggered an unprecedented global response to contain one of the most disruptive public health emergencies in modern history.

Edited by Alokesh Bhattacharyya. Produced by Tushar Deep Singh.

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