India is easing foreign direct investment restrictions from border-sharing countries, allowing investments up to ten percent of paid-up capital through automatic approval routes.

India is easing foreign direct investment restrictions from border-sharing countries, allowing investments up to ten percent of paid-up capital through automatic approval routes. This policy shift aims to revive Chinese manufacturer interest and help India integrate into global value chains. However, security concerns remain critical. The government must carefully scrutinize electronic components, particularly those vulnerable to remote control or sabotage, such as drone control units. While simpler components can safely involve foreign capital and technology, sensitive sub-assemblies and assemblies require strict indigenous control. The challenge lies in balancing growth ambitions with national security by developing expertise to distinguish between investments that strengthen manufacturing capacity and those that pose security risks.