The Union Cabinet has approved a partial relaxation of Foreign Direct Investment (FDI) rules under Press Note 3 (2020) for countries sharing land borders with India. Press Note 3, brought in during the COVID-19 pandemic to prevent opportunistic takeovers, requires government approval for investment from neighbours such as China, Pakistan, Bangladesh, Nepal, Myanmar, Bhutan and Afghanistan. The relaxation permits limited FDI in capital goods, electronic capital goods, electronic components and solar inputs (polysilicon and ingot-wafer). Investments of up to 10% beneficial ownership can come through the automatic route, with majority ownership kept with Indian entities. Strategic sectors like semiconductors remain restricted.