Bigger foreign investments could get faster nod; Centre weighs ₹15,000 cr FDI threshold

The government is considering raising the threshold at which foreign direct investment proposals require approval from the Cabinet Committee on Economic Affairs (CCEA) to ₹15,000 crore from the existing ₹5,000 crore, a move aimed at easing approvals for larger investments.

The Centre is considering a proposal to triple the FDI approval threshold for proposals that need to be placed before the Cabinet Committee on Economic Affairs, according to sources.

Under the existing policy, FDI proposals involving total foreign equity inflows of more than ₹5,000 crore are considered by the CCEA. Proposals below that threshold are decided by the respective line ministries.

The proposed change would raise the CCEA threshold to ₹15,000 crore, potentially allowing more large foreign investment proposals to be cleared at the ministry level instead of going to the Cabinet-level committee.

The proposal is still at the discussion stage and has not been approved by the government.

Why is the FDI threshold being reviewed?

The ₹5,000-crore threshold has remained unchanged since November 2015. Government sources said changing economic conditions, inflation, the increasing scale of investments and the objective of improving ease of doing business have prompted a review.

A committee of secretaries has also reportedly suggested increasing the threshold for FDI proposals requiring government approval.

If approved, the move could reduce the number of large proposals requiring CCEA consideration and potentially streamline the approval process for investors.

What is the CCEA's role?

The Cabinet Committee on Economic Affairs, headed by Prime Minister Narendra Modi, is responsible for taking decisions on several major economic matters.

Under the current FDI framework, proposals above the prescribed threshold are placed before the CCEA. Raising the threshold would therefore shift some proposals currently requiring CCEA consideration to the relevant ministries.

The proposed change would not mean that all foreign investments up to ₹15,000 crore would automatically be approved. Other sector-specific FDI rules and government approval requirements would continue to apply.

Another proposal on downstream FDI

The government is also examining changes to rules governing downstream or indirect foreign investment.

One proposal under consideration could exempt an Indian company from seeking fresh government approval for downstream foreign investment when the domestic company making the investment has already obtained the required approval at the upstream level.

At present, prior government approval is required for downstream investments in certain sectors under the government approval route and for investments involving entities from countries that share a land border with India.

Why the proposal matters

The proposed changes come as India continues to seek higher foreign investment and a more streamlined approval system.

According to the sources, cumulative FDI inflows into India crossed USD 1.16 trillion between April 2000 and March 2026.

Major sources of foreign investment include Mauritius, Singapore, the US, the Netherlands, Japan, the UK and the UAE.

A higher CCEA threshold could make the approval process more efficient for large investors by reducing the number of proposals requiring consideration at the Cabinet level.

However, the impact will depend on the final policy and whether other approval requirements remain unchanged.

Analysis: what could change if approved?

The proposed increase would represent a significant change from the threshold introduced in 2015. A rise from ₹5,000 crore to ₹15,000 crore would mean that proposals between those two values could potentially be handled by the relevant ministries rather than the CCEA.

For the government, the change could help reduce administrative layers and support its broader ease-of-doing-business agenda.

For investors, the key benefit could be a simpler approval pathway for large projects. However, the proposal is still under consideration, so it is too early to assess how many investments would actually move outside the CCEA approval process.

The separate proposal on downstream investment could also address situations where foreign investment has already been vetted at an earlier stage, potentially reducing repeated approval requirements.