Foreign Direct Investment (FDI) Policy Map

The Shift in Capital Inflow Structures

India received $70.9 billion in FDI in FY23. While impressive, the underlying structure of this capital has shifted dramatically from services to manufacturing, driven largely by global supply chain diversification (China Plus One).

Sector	Limit	Route
IT & Software	100%	Automatic
Defense	74%	Automatic (Govt route beyond 74%)
Single Brand Retail	100%	Automatic (with local sourcing norms)

Common Mistake: Press Note 3 (2020)

A frequent error made by European and US firms is ignoring Press Note 3. If an investing entity shares a land border with India (or its beneficial owner is situated in such a country—primarily China), the investment automatically falls under the Government Route, regardless of the sector.