Government mulls raising FDI approval threshold to ₹15,000 crore from ₹5,000 crore

The government is considering a proposal to raise the threshold for foreign direct investment (FDI) proposals requiring approval from the Cabinet Committee on Economic Affairs (CCEA) to ₹15,000 crore from ₹5,000 crore currently, in a move aimed at improving the investment climate, PTI reported citing sources.

The proposal is currently at the discussion stage, the report said.

Existing FDI approval limit unchanged since 2015

Under the existing FDI policy, proposals involving total foreign equity inflow of more than ₹5,000 crore are placed before the CCEA for consideration. For proposals below this threshold, the respective line ministries are the competent authorities for taking a decision.

The ₹5,000-crore threshold has remained unchanged since November 2015.

According to sources, prevailing economic conditions, inflation, the growing scale of investments and the government's objective of promoting ease of doing business have prompted a review of the existing threshold.

A committee of secretaries had also suggested raising the CCEA approval limit for FDI proposals requiring the government approval route, PTI reported.

The CCEA is headed by Prime Minister Narendra Modi and includes key Union Cabinet ministers, including the Home Minister and Finance Minister.

Government also considering easing downstream FDI norms

Separately, the government is considering easing norms for downstream investments to facilitate overseas fund inflows and boost job creation, according to the report.

Under the proposal, the government may exempt indirect foreign investment in Indian companies from requiring fresh approval if the upstream domestic company has already obtained government clearance.

At present, prior government approval is required for downstream or indirect foreign investment in two cases — sectors that fall under the government approval route for FDI and investments originating from countries that share a land border with India.

The government has taken several measures in recent years to attract foreign capital. According to the report, cumulative FDI inflows into India crossed $1.16 trillion between April 2000 and March 2026.

The top sources of FDI include Mauritius, Singapore, the US, the Netherlands, Japan, the UK and the UAE, among others.