India Weighs Higher FDI Approval Threshold to Speed Up Big-Ticket Investments

• India may raise the CCEA approval limit for FDI proposals to $1.58 billion from $526.3 million.

• The current threshold has remained unchanged since November 2015.

• The proposal aims to simplify approvals and improve ease of doing business.

• Downstream investment rules may also be eased.

• FDI inflows have crossed $1.16 trillion since 2000.

The Indian government is considering a proposal to sharply raise the value threshold for foreign direct investment proposals that require clearance from the Cabinet Committee on Economic Affairs, as part of a broader effort to make the country more attractive to overseas investors.

According to sources cited by news agency PTI, the Centre is examining whether the approval limit should be increased to Rs 15,000 crore, equivalent to about $1.58 billion, from the existing Rs 5,000 crore, or around $526.3 million. The proposal is still at the discussion stage and forms part of a wider review of India’s FDI framework.

Under the current rules, any FDI proposal involving total foreign equity inflows above $526.3 million must be placed before the Cabinet Committee on Economic Affairs for consideration. Proposals below that level are handled by the concerned administrative ministries.

The present threshold has been in place since November 2015. Officials are now reviewing whether it remains appropriate given inflation, changing economic conditions, and the larger size of investment proposals entering India in recent years.

Raising the threshold would allow individual ministries to process more FDI proposals without sending them to the CCEA. The move is expected to support the government’s ease-of-doing-business agenda by reducing procedural layers and potentially shortening approval timelines for major investments.

Sources said a committee of secretaries had earlier recommended revising the limit for proposals that need CCEA-level scrutiny.

The CCEA is one of the government’s most important Cabinet panels and is chaired by Prime Minister Narendra Modi. Its members include senior ministers, including those responsible for home affairs and finance.

In a separate but related move, the government is also looking at possible changes to rules governing downstream, or indirect, foreign investment in Indian companies. These changes are intended to encourage capital inflows from abroad and support job creation.

Under the proposal being discussed, an Indian company receiving indirect foreign investment may not need to obtain fresh government approval if the domestic company higher in the ownership chain has already secured the required clearance.

At present, prior government approval is required for downstream or indirect foreign investment in two key cases. The first applies to sectors where FDI is allowed only through the government approval route. The second applies to investments involving entities from countries that share a land border with India.

The proposed relaxation could reduce duplication in the approval process where the same investment has effectively already been reviewed at an earlier level of the ownership structure. This may make compliance easier for companies with layered investment arrangements.

India has taken several steps in recent years to liberalise its FDI regime and attract greater foreign capital. According to figures cited by PTI, cumulative FDI inflows into the country crossed $1.16 trillion between April 2000 and March 2026.

Major sources of foreign investment into India include Mauritius, Singapore, the United States, the Netherlands, Japan, the United Kingdom, and the United Arab Emirates, along with other investor nations.

The proposed increase in the CCEA approval threshold, together with potential changes to downstream investment rules, reflects the government’s attempt to strike a balance between faster investment facilitation and continued scrutiny of sensitive sectors. If implemented, the changes could make it easier for large global investors to deploy capital in India while preserving oversight where national or strategic concerns are involved.