New Delhi, July 21 -- In a potentially significant shift in India's foreign investment policy, NITI Aayog has recommended allowing Chinese entities to acquire up to a 24 percent stake in Indian companies without requiring prior security clearance.

The proposal, now under review by key ministries, could streamline investment procedures for Chinese firms that currently face stringent regulatory scrutiny.

At present, all investments from countries sharing a land border with India, including China, are subject to mandatory security and political clearances.

These measures were put in place in July 2020 amid heightened border tensions and concerns over hostile takeovers.

The current framework requires such investors to register with a spec...