CFIUS Review: What It Is and How It Affects Manufacturing in India and the US

When a foreign company tries to buy or invest in a US manufacturing business, the CFIUS review, a US government process that screens foreign investments for national security risks. Also known as Committee on Foreign Investment in the United States, it doesn’t just look at deals—it blocks them if it sees a threat to critical tech, defense, or infrastructure. This isn’t about trade wars. It’s about control. If your factory in India makes parts for drones, semiconductors, or medical devices, and a US firm wants to buy you, CFIUS might step in—even if you’ve never sold a single product in America.

Indian manufacturers aren’t immune. Companies like Tata, Reliance, or even small-scale electronics assemblers have faced scrutiny when US investors show interest. Why? Because CFIUS cares about supply chain access. If your plant in Gujarat makes circuit boards used in US military gear, or your chemical plant produces rare materials for batteries, that’s a red flag. The committee doesn’t care if you’re trustworthy. It cares if your tech could be turned against the US. And since 2018, the rules got tighter. Now even minority stakes, joint ventures, and licensing deals can trigger a review. This isn’t just about China anymore. India’s rise in electronics and pharma manufacturing means more deals are under the microscope.

It’s not all bad news. Many Indian firms pass CFIUS review without issue—if they avoid sensitive tech, keep data local, and don’t handle classified systems. But if you’re building something that touches AI, robotics, or critical minerals, you need to plan ahead. Talk to legal experts. Know what your products are used for. And don’t assume that just because you’re not in China, you’re safe. The US doesn’t target countries—it targets capabilities.

Below, you’ll find real examples of how this plays out. From a small Indian electronics maker that got blocked after a US investor stepped in, to a steel fabricator that restructured its ownership to clear the review. These aren’t abstract policies. They’re decisions that change who gets to grow, who gets left behind, and where the next wave of manufacturing happens.