The Press Note 3 (2020 Series) is a provision that amended India's Foreign Direct Investment (FDI) policy, issued by the Department for Promotion of Industry and Internal Trade (DPIIT) on April 17, 2020. It was created during the early weeks of the COVID-19 pandemic to prevent "opportunistic takeovers/acquisitions" of financially distressed Indian companies whose valuations had dropped.
The Press Note works by mandating that an entity of a country that shares a land border with India, or where the beneficial owner of an investment is situated in or is a citizen of such a country, can invest only under the Government route. This requires prior government approval for all FDI from these countries, irrespective of the sector. The countries covered include China, Pakistan, Bangladesh, Nepal, Myanmar, Bhutan, and Afghanistan. Furthermore, any transfer of ownership resulting in the beneficial ownership falling within this purview also requires government approval, as specified in Para 3.1.1(b).
This provision connects to the broader FDI policy framework, as it amended Paragraph 3.1.1 of the Consolidated FDI Policy and was subsequently incorporated into Rule 6 of the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 (FEMA 20(R)).
The restrictive regime of Press Note 3 (2020) was recently revised by Press Note 2 of 2026 (PN2). The core requirement for government approval remains for investments that confer control or exceed a 10 percent beneficial ownership threshold from land-bordering countries. However, investments with beneficial ownership from these countries that do not exceed 10 percent and do not confer control are now permitted under the automatic route.