What are India's FDI sectoral caps and when is government approval required?

India's FDI policy sorts sectors into three broad categories: sectors open to 100% FDI under the automatic route, requiring only post-investment reporting rather than prior approval; sectors with a cap below 100% or a government-approval requirement above a certain stake (common in defence, insurance, and select media categories); and a short list of prohibited sectors where FDI isn't permitted at all.

Because these caps and routes are sector-specific and do change, the right first step for any new investment is confirming the current classification for your specific business activity — not assuming last year's rule, or a competitor's structure in an adjacent sector, still applies.