India will retain curbs on investment from nations with which it shares a land border, the finance minister said days after the South Asian country struck a pact with China on patrolling their disputed Himalayan frontier.

"I cannot blindly receive foreign direct investment (FDI) because I want money for investment, forgetful or unmindful of where it is coming from," Nirmala Sitharaman told a Tuesday gathering at the Wharton Business School in the United States.

The dispute led to stagnation in ties between the world's two most populous countries at a time of exploding demand for electric vehicles, semiconductors and artificial intelligence, key growth areas offering opportunities for cooperation.

In 2020, India stepped up vetting and security clearances in scrutinising investments from companies based in neighbouring countries but did not mention any nations.

The step, widely seen as aimed at staving off takeovers and investments by Chinese firms, effectively turned away billions of dollars from carmakers BYD and Great Wall Motor, while red tape ensnarled Indian firms with Chinese stakeholders.

However, Indian imports of goods from China have surged 56 percent since the 2020 border clash, nearly doubling New Delhi's trade deficit with Beijing to $85 billion.

China remains India's biggest source of goods and was its largest supplier of industrial products last year.