With Press Note 2 (PN2) of 2026, India has rewritten rules of the game for capital flowing from China and other land- bordering neighbours. The amendment reframes the 2020-era national security cordon from a blanket quarantine to a calibrated filter that distinguishes control from mere capital.
It is a pivotal move in India's long experiment with 'securonomics', embedding geopolitical risk into investment policy without choking growth. The starting point remains PN3 of 2020, issued at the height of the pandemic and escalating border tensions with China. That measure shifted all investments from entities in, or beneficial owners from, countries sharing a land border with India from the automatic route to the government approval route, regardless of sector, stake or size. It also extended the approval net to indirect and beneficial ownership.
