India relaxes China FDI rules, paves way for investment surge

• Union Cabinet approves significant relaxations in Foreign Direct Investment (FDI) conditions for neighboring countries, primarily China.
• This decision reverses the 2020 Press Note-3 policy, which mandated government approval for Chinese FDI following the Doklam standoff.
• The move aims to clear the path for direct Chinese investment, despite India's $100 billion trade deficit in $130 billion bilateral trade.
• Relations have improved since 2024, marked by PM Narendra Modi's meeting with Chinese President Xi Jinping in Kazan, Russia.
• Confidence-building steps include troop disengagement from LOC, agreements on flights/Mansarovar Yatra, and China's support for India's AI Summit.