The Union Cabinet approved amendments to India's FDI policy to allow entities from countries sharing a land border with India to make non-controlling investments of up to 10% beneficial ownership through the automatic route. The key point is that a small, non-controlling stake can use the automatic route, while the ownership and control limits remain part of the safeguard framework.

The amendment relaxes the 2020 restrictions under which FDI from countries sharing a land border with India required government approval. Those restrictions were linked to the concern that Indian companies should be protected from hostile takeovers. The new approval keeps that security concern in place but creates a more open path for limited investments. It shows how investment policy balances capital-flow needs with national-security safeguards.

Under the automatic route, eligible FDI does not need prior government approval. Beneficial ownership refers to the actual ownership stake in a company. In this amendment, the 10% threshold matters because the permitted investment is described as non-controlling. Investments above this threshold or investments that give control continue to require government approval under the 2020 framework. In prelims, likely facts include the 10% limit, automatic route, land-border country condition, beneficial ownership, and safeguards against hostile takeovers. In mains, the amendment can be used as an example of balancing investment openness, economic security, and national-security safeguards.