Investment rule tweaks will benefit electronics and rare earth sector in India, says DPIIT Secretary

DPIIT's investment rule changes will enhance India's electronics and rare earth sectors, boosting capital flow and joint ventures.

The easing of rules related to investment from countries sharing a land border with India will help in the manufacture of capital goods, electronic capital goods, electronic components, polysilicon and ingot wafers, advanced battery components, rare earth permanent magnets, and rare earths themselves, Department for Promotion of Industry and Internal Trade Secretary Amardeep Singh Bhatia said on Wednesday (March 11, 2026). 

Sector analysts and industry players too have welcomed the move, saying it will increase the flow of capital into India, and encourage foreign companies to enter into joint ventures here. 

The Union Cabinet on Tuesday (March 10, 2026) approved changes to the ‘Press Note 3’ issued in 2020 that had mandated that investments from all countries that shared a land border with India — referred to as Land Border Countries (LBCs) — would have to secure Indian government approval first. 

The new changes now provide exemptions to companies where less than 10% ownership is from LBCs. Further, proposals for LBC investment in specified sectors such as capital goods manufacturing, electronic capital goods manufacturing, electronic component manufacturing, polysilicon and ingot wafers, advanced battery components, rare earth permanent magnets, and rare earths would be cleared within 60 days.

“Scrutiny of the proposals and political concerns will continue, but the Committee of Secretaries will expedite the proposals within the time limit of 60 days” Mr. Bhatia said at a press briefing. 

“It [the amendment] will bring a lot of certainty, as there was a lot of interest in investment in India,” he added, saying that the change would also eventually reduce India’s import dependence.