Policy Newsletter | March 2026

India weaves economic security and pragmatism into foreign and domestic policy

The 2026 edition of the Raisina Dialogue, Indian Government’s annual flagship conference, underscored how India’s stance on strategic competition, economic security and technology governance are converging. Soon after the conference, India announced a marked shift in its FDI screening mechanism directed towards Chinese firms and granted exemptions to facilitate their selective participation in public procurement.

Raisina Dialogue 2026

Dentons was represented at the 2026 edition of the Raisina Dialogue by Santosh Pai, Partner in the New Delhi office of Dentons Link Legal. Highlights of four key sessions that are relevant for Dentons and its global clients are produced below:

Contested Frontiers: Power, Polarity and Periphery

This session noted that global power is fragmenting across military, economic and technological domains. Traditional alliance guarantees are weakening, while control over AI, semiconductors and digital infrastructure is emerging as a decisive source of influence.

India considers security as being inseparable from industrial and technology policy. It recognizes that efforts to build self‑reliance and domestic capacity building will need to be intensified.

Repairing the Commons: New Groups, New Guardians, New Avenues

There was acknowledgment that classical multilateralism is no longer fit for purpose. And that governance is shifting towards plurilateral, interest‑based coalitions, particularly in technology, climate and supply‑chain resilience.

As rule making occurs through partnerships rather than legally constituted organizations, India is positioning itself as a bridge between Global North and Global South

Tomorrowland: Towards a Tech‑topia

There was strong convergence around risk‑based AI governance, trusted vendor frameworks and technology sovereignty. India’s Digital Public Infrastructure (DPI) was showcased as a flagship governance export.

Market access will increasingly depend on trust, transparency and auditability. Trusted supplier regimes will be regularized as policy tools rather than temporary exceptions.

Trade in the Time of Tariffs: Recovery, Resilience, Reinvention

Speakers agreed that the weaponization of trade is now structural. Tariffs, export controls and investment screening are permanent features, not transitional distortions.

Indian policymakers recognize that supply‑chain resilience will outweigh cost efficiency in the long term. This makes trade policy a function of security, technology and climate objectives.

The PN3 Amendment

On March 10, 2026, India announced three broad changes to its FDI screening mechanism under Press Note 3. First was a 10% di-minimis rule which formalized market practice that had evolved over applying money laundering rules to exempt private equity funds with less than 10% beneficial ownership from countries sharing land borders from obtaining FDI approval. Second, sectors accounting for approximately 60% of imports from China will be treated as priority sectors including electronic components, capital equipment and certain renewable energy inputs. Third was a commitment to approve joint ventures with a majority Indian partner in these sectors within 60 days.

A concluding paragraph in the press release announcing the cabinet decision revealed India’s motivations behind such relaxations. It cited “greater FDI inflows, access to new technologies, domestic value addition, expansion of domestic firms and integration with global supply chains” as the expected benefits from these changes. In other words, India is willing permit Chinese investments ideally in joint ventures controlled by Indian partners where there are significant positive spillovers.

The PN3 Amendment represents a calibrated adjustment rather than an overhaul, but its implications go far beyond Chinese firms. Global supply chain players sitting on the fence due to India’s dilemma over Chinese investments will find new confidence in moving forward with their ‘China plus One’ strategies.

Policy Implications

This year’s Raisina dialogue will be remembered for normalizing the belief that regulations have become a primary tool of geopolitics. In the coming years, India will make repeated efforts at leveraging its domestic market through regulations in the spheres of procurement and technology standards to shape markets. Such strategies will accompany a foreign policy model of strategic autonomy with differentiated bilateral engagement on selected issues. Lastly, India’s overture towards Chinese investment is a necessary but not sufficient condition for Chinese investments to resume. A lot will depend on follow-up actions that will boost investor confidence and offer policy certainty.

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