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Home Blog FDI Press Note 3 Amendment — 10 March 2026

Cabinet Amends FDI Press Note 3: Land Border Country Investment Rules Overhauled — What Indian Businesses and Investors Must Know

🔴 Breaking — 10 March 2026 FEMA / FDI Cabinet Decision 9 min read 10 March 2026 · Shahi & Co., Chartered Accountants

In a landmark policy decision on 10 March 2026, the Union Cabinet chaired by Prime Minister Narendra Modi approved sweeping amendments to India's FDI guidelines governing investments from Land Bordering Countries — the rules commonly known as Press Note 3 or PN3. The changes unlock the automatic investment route for minority LBC investors, introduce a formal beneficial ownership definition aligned with PMLA 2005 standards, and mandate a 60-day clearance window for priority manufacturing sectors. For Indian startups, PE/VC funds with global limited partners, and manufacturing businesses in electronics and capital goods, this is the most significant FDI policy development in six years.

In This Article
  1. What Is Press Note 3 and Why It Matters
  2. The Two Key Changes Approved by Cabinet
  3. Beneficial Ownership: Definition Now Codified
  4. The 10% Non-Controlling Route — In Detail
  5. 60-Day Approval Window: Sectors and Conditions
  6. Which Countries Are Land Bordering Countries?
  7. Impact on Indian Startups and Deep Tech
  8. Impact on PE/VC Funds and Global Investors
  9. Impact on Manufacturing: Electronics, Solar, Capital Goods
  10. Compliance Steps: What You Must Do Now
  11. Risks and Safeguards That Remain
  12. Frequently Asked Questions

1. What Is Press Note 3 and Why It Matters

Press Note 3 of 2020 (PN3) was introduced by the Department for Promotion of Industry and Internal Trade (DPIIT) on 17 April 2020 — during the peak of the COVID-19 pandemic — to protect Indian companies from opportunistic takeovers by entities from countries sharing a land border with India.

The core rule under PN3 was simple but sweeping: any investment from a Land Bordering Country (LBC), regardless of size or intent, required prior government approval. There was no minimum threshold, no distinction between strategic and passive investments, and no timeline for processing approvals.

1
April 2020
Press Note 3 Introduced
All FDI from Land Bordering Countries placed under mandatory government approval route. Primary intent: prevent Chinese entities from acquiring stressed Indian companies during the COVID-19 crisis.
Chartered AccountantDelhiAdvisory

How to Choose a Chartered Accountant in Delhi — 10 Questions to Ask

By Shahi & Co. March 2026 New Delhi

Selecting a Chartered Accountant is not a routine vendor decision — it is one of the most consequential professional relationships your business will enter into. The right CA firm in Delhi will not only keep your books accurate and your taxes filed on time; it will actively protect your interests, anticipate regulatory changes, and support your growth. The wrong choice can cost you far more than their fees.

Our New Delhi practice has worked with businesses of every size — from early-stage startups in Delhi's Okhla and Nehru Place corridors to established manufacturing firms across the NCR. Over the years, we have seen what separates a productive CA relationship from a frustrating one. Here are the ten questions that matter most.

1. Do You Specialise in My Industry or Business Type?

A CA who handles primarily individual tax returns will approach a manufacturing company's accounts very differently from one who has spent years working with similar businesses. Before you engage any CA firm in Delhi, ask directly about their client base. Do they work with startups? Exporters? Real estate companies? Professional services firms? Each sector has its own tax nuances, compliance calendars, and common problem areas.

What to Look For

Ask the CA to walk you through a compliance calendar for a business like yours. If they can do this fluently — listing the specific GST return deadlines, TDS payment dates, and annual filing obligations relevant to your sector — that is a strong signal they have genuine familiarity with your type of business.

2. What Is Your Team Structure?

A sole practitioner CA in Delhi may be perfectly adequate for a small business with straightforward compliance needs. But as your business grows, you need a firm with sufficient bench strength to handle your work even when the principal is unavailable, and to bring in specialist knowledge when a cross-disciplinary issue arises.

Ask how many qualified CAs are on staff, how many article assistants, and whether the firm has in-house legal or company secretarial support. For businesses with international operations or FEMA implications, the presence of a qualified team member with RBI and FEMA experience is particularly valuable.

3. How Do You Charge — Retainer, Hourly, or Per-Assignment?

Fee structures vary significantly across CA firms in New Delhi. Some work on an annual retainer that covers all routine compliance. Others charge per-assignment, which suits businesses that only need occasional help. Hourly billing is less common in India but does exist for advisory work.

Watch Out For

An unusually low retainer that doesn't specify what is and isn't included. Many businesses discover mid-year that their "all-inclusive" retainer excluded GST advisory, ROC filings, or income tax representations — each of which attracts a separate fee. Always ask for a written scope of work.

4. How Will We Communicate Day to Day?

Communication is where many CA relationships break down. Some firms are highly accessible — responding to WhatsApp messages within hours, available for a quick call when a compliance question arises. Others operate more formally, with structured quarterly meetings and email-only communication in between.

Neither model is inherently superior — it depends on what your business needs. A rapidly scaling startup in Delhi's tech sector may need near-daily touchpoints during fundraising. A stable trading company may be comfortable with monthly check-ins. Be honest about your expectations upfront.

5. Are You Current on GST, Income Tax, and MCA Filings?

The Indian tax and regulatory landscape changes constantly. The GST Council meets multiple times a year. The Finance Bill brings amendments to the Income Tax Act annually. The MCA updates its filing requirements on the Companies Act portal with regularity. A CA who is not actively investing in staying current — through ICAI continuing education, reading circulars, and tracking case law — will inevitably give you outdated advice.

A Simple Test

Ask your prospective CA about a recent development in their field — the GST amnesty scheme, the new Income Tax Bill 2025, or the latest Press Note amendment on FDI. How they respond tells you a great deal about how closely they are following the regulatory environment.

6. Can You Handle Both Compliance and Advisory?

Many CA firms in Delhi are primarily compliance-focused — they will file your returns accurately and on time, but they are not equipped to advise you on structuring a transaction, evaluating the tax implications of a new business model, or planning for a potential acquisition. For businesses at a growth stage, advisory capability is as important as compliance accuracy.

Ask specifically whether the firm can assist with tax planning, business structuring, and financial modelling — not just with returns and audits.

7. Do You Have Experience With Regulatory Matters — FEMA, RBI, SEBI?

If your business involves foreign investment, overseas transactions, import-export, or dealings with non-residents, you need a CA with solid FEMA and RBI experience. These are specialist areas — the consequences of non-compliance are severe, including compounding penalties and regulatory scrutiny that can impede your business operations.

Similarly, if you are considering an IPO, a rights issue, or private placement of securities, you need a CA firm in Delhi that has worked with SEBI regulations and understands the disclosure and compliance requirements involved.

8. What Happens If I Receive a Notice or Scrutiny?

Every business will, at some point, receive a notice — from the Income Tax Department, the GST authorities, or the MCA. How your CA firm handles this situation is the true test of their capability and their commitment to your interests.

Questions to Ask

  • Do you handle representations before the Income Tax Officer personally, or do you outsource this?
  • Have you appeared before the CIT(A) or ITAT on behalf of clients?
  • Is there a separate fee for notice responses, or is it included in your retainer?
  • Can you share an example of a notice you successfully resolved for a client?

9. Who Will Actually Work on My Account?

In many larger CA firms, the partner who pitches for your business is not the person who works on your account day to day. The actual work is done by article assistants or junior staff, with the partner reviewing only at the end. This is not inherently problematic — junior staff under proper supervision can deliver excellent work — but you should know this upfront so you can set appropriate expectations.

At smaller and mid-sized CA practices in Delhi — including ours — the principal CA is directly involved in client work. This is often a better fit for businesses that want senior attention on their accounts rather than an account manager model.

10. Can I Speak to an Existing Client?

Any reputable CA firm in New Delhi should be able to provide references — clients in similar industries or of similar size who are willing to speak about their experience. If a firm is reluctant to provide references, treat that as a significant yellow flag.

When you do speak to references, ask specifically about responsiveness, accuracy of advice, how the CA handled a difficult situation, and whether they would engage the firm again given what they know now.

Making Your Decision

Choosing a CA is ultimately a question of fit — professional competence, communication style, and cultural alignment with your business. The ten questions above will help you assess competence. Trust your judgment on the rest.

If you are a Delhi NCR-based business evaluating your options, we would be glad to have a no-obligation conversation about how our practice might serve your needs. Our office is located in Pushp Vihar, South Delhi, and we serve clients across the Delhi metropolitan area and across India.

Need Expert Guidance?

Our team of Chartered Accountants in New Delhi is available to assist Delhi NCR businesses and clients across India with personalised advice.

Schedule a Consultation

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