While many sectors welcome foreign direct investment in India, several industries restrict or prohibit foreign investment due to strategic, security and public interest concerns. According to the latest FDI policies, the following sectors are entirely prohibited from accepting foreign direct investment in India:

• Lottery Business: This includes both government and private lotteries, as well as online lotteries.
• Gambling and Betting: All forms, including casinos, are not open to foreign investments.
• Chit Funds and Nidhi Companies: These financial instruments and savings entities are restricted.
• Real Estate Business or Construction of Farmhouses: While real estate development is allowed, direct involvement in real estate business and construction of farmhouses is prohibited.
• Manufacturing of Tobacco Products: This includes cigars, cigarettes and other tobacco-related products.
• Sectors not open to private sector investment: This includes atomic energy and certain railway operations​.

Additionally, FDI in sectors like multi-brand retail, defence, and telecom are subject to specific caps and conditions under the approval route, requiring prior government approval. These restrictions ensure that foreign investments align with India’s strategic interests while fostering a controlled and beneficial economic environment.