India’s proposed move to tighten foreign investment norms by formally recognising “Foreign-Owned and Controlled Entities” (FOCE) is not just a bureaucratic tweak ~ it is a decisive step toward aligning FDI oversight with economic reality. The global investment landscape has evolved rapidly, and it is only prudent that our regulatory frameworks catch up. For years, indirect foreign investments ~ often routed through complex offshore structures ~ have operated in a grey zone. These investments allowed foreign actors to effectively control Indian businesses while sidestepping FDI rules that were designed to protect national interests. Whether in e-commerce, fin-tech, pharmaceuticals, or media, the use of layered corporate entities and overseas funds has enabled backdoor entry into restricted sectors. With the FOCE category, the government is rightly attempting to draw a clear line: if control lies abroad, the obligations under FDI policy must apply.

This clarity is especially timely. India has emerged as a pivotal destination for global capital, but this openness must be matched with strategic oversight. Since 2020, when prior approval was mandated for investments from countries sharing land borders with India, particularly China, the intent to shield critical sectors from opaque foreign control has been evident. However, without accounting for indirect control structures, enforcement remained porous. The new FOCE rules aim to plug this gap. This move also signals India’s growing........

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