The proposal is currently under inter-ministerial discussions, they said.
The government has in recent years undertaken a series of reforms aimed at liberalising the country’s FDI policies with the goal of stimulating economic growth and encouraging foreign capital inflows.
To promote FDI, the government has put in place an investor-friendly policy, with most sectors open to 100 per cent overseas investments under the automatic route except for a few strategically important sectors.
More than 90 per cent of FDI inflows are received under the automatic route.
One of the sources said that to ensure that India remains an attractive and investor-friendly destination, the government reviews the FDI policy on a continuous basis and makes changes from time to time after holding extensive consultations with stakeholders.
Downstream investment means indirect foreign investment, by an eligible Indian entity, into another domestic firm by way of subscription or acquisition.
India attracted cumulative FDI inflows of USD 843 billion between 2014-15 and 2025-26, registering a 169 per cent increase over the preceding 12-year period.