The general rule
Activities not listed in the FDI policy are open to 100% FDI under the automatic route. Software products, SaaS, IT services, BPM, engineering R&D and data processing are not separately listed, so the general rule applies, subject to applicable laws and conditions. Caps come from the Consolidated FDI Policy 2020 as amended by later Press Notes. Sector laws on telecom, data protection and online gaming apply in addition.
Caps, routes and conditions by activity
| Activity | Cap and route | Key conditions |
|---|---|---|
| Software products, SaaS, IT services, BPM, engineering R&D, data processing | 100%, automatic route | Not separately listed in the FDI policy, so the general 100% automatic route applies, subject to applicable laws and conditions. |
| Data centres, cloud and hosting | 100%, automatic route | No sector-specific cap. State IT policies, such as Maharashtra’s 2023 policy, cover data centres; the data-centre tax exemption has separate conditions (see tax and zones). |
| Telecom services, including internet service providers | 100%, automatic route | 100% automatic since Press Note 4 (2021), per DPIIT’s automatic-route list, subject to licensing and security conditions; operators need authorisation under the Telecommunications Act 2023. Land-border investors need government approval. |
| E-commerce, marketplace model | 100%, automatic route | The platform acts as a facilitator between buyer and seller and may not own the inventory it sells to consumers. |
| E-commerce, inventory model | Not permitted, except for exports | Press Note 3 (2026) of 23 July 2026, in force from 3 September 2026 (FEMA amendment of 2 September 2026): marketplace entities with FDI may hold inventory to export goods made in India; domestic inventory sales stay barred. |
| Uploading or streaming news and current affairs through digital media | 26%, government route | Applies to digital news publishers; other software and platform businesses follow the general rule. |
| Semiconductor design | 100%, automatic route | FDI is open, but Semicon 2.0 design support goes only to companies owned and controlled by Indian citizens (or OCIs, for commercial design). |
| Any activity, with an investor from a land-border country | Government route; indirect stakes up to 10% without control: automatic | Press Note 2 (2026): beneficial ownership is defined as under the PMLA. Up to 10% non-controlling land-border beneficial ownership can use the automatic route, with prior reporting on the FIF/NSWS portal. |
Land-border investors
Press Note 2 (2026) changed the test for investors from countries sharing a land border with India:
- Beneficial ownership is defined as under the Prevention of Money Laundering Act (PMLA).
- Land-border beneficial ownership above 10%, or with control, keeps the investment on the government route.
- Up to 10% non-controlling land-border beneficial ownership can use the automatic route, with prior reporting on the FIF/NSWS portal.
- In telecom, land-border investors need government approval regardless.
The entry-vehicle pages note a related fast-track: land-border investors taking up to 49% in a fast-track sector, where resident Indians keep majority ownership and control, have a 60-day decision target (DPIIT SOP, 4 May 2026). See land-border investors for the general rule.
Conditions that sit outside the FDI policy
- Telecom. Authorisation under the Telecommunications Act 2023 from the Department of Telecommunications is needed to establish, operate, maintain or expand a telecommunication network, for example as an internet service provider.
- Data protection. The DPDP Rules 2025 phase in from 13 November 2025; see regulators and registrations.
- Online gaming. Online money games are prohibited under the 2025 Act, in force from 1 May 2026; e-sports and notified social games register with the Online Gaming Authority of India.
- Chip design. FDI is open, but public design support under Semicon 2.0 is reserved for Indian-owned and -controlled companies; foreign groups can take part as partners. See central incentives.
- Cloud sales. The data-centre tax exemption requires the foreign company not to own or operate the facility and to sell to Indian users only through an Indian reseller; see tax and zones.
What to check next
- Confirm your activity is not separately listed in the Consolidated FDI Policy 2020 or a later Press Note before assuming the general rule.
- Trace the ownership chain to the PMLA beneficial owner and test each land-border holding against the 10% and control thresholds.
- For marketplaces, confirm that any inventory held is for export of goods made in India; domestic inventory sales remain barred.
- For telecom or ISP activity, check the authorisation requirement and the security conditions with the Department of Telecommunications.
- For chip design, decide early whether you need Semicon 2.0 support, which changes the ownership structure you can use.