The correct answer is Both 1 and 2.

• FDI is allowed in India under two modes: the automatic route or through the government route.
• Companies don't need government approval in Automatic Route.
• Companies need Government approval in Government mode.
• Provisions of the New FDI policy:
  • An entity of a country, which shares a land border with India or where the beneficial owner of investment into India is situated in or is a citizen of any such country, can invest only under the Government route. Hence, Statement 1 is correct.
  • A transfer of ownership in an FDI deal that benefits any country that shares a border with India will also need government approval.
  • Investors from countries not covered by the new policy only have to inform the RBI after a transaction rather than asking for prior permission from the relevant government department.
• India shares land borders with Pakistan, Afghanistan, China, Nepal, Bhutan, Bangladesh, and Myanmar.
• This revised FDI policy aims to curb opportunistic takeovers/acquisitions of Indian companies due to the current Covid-19 pandemic. Hence, Statement 2 is correct.
  • China's investment in the Indian business space has been expanding rapidly​.