The United States on 23 October 2026 proposed significantly widening restrictions on American capital flowing into sensitive overseas technologies, adding biotechnology, hypersonic systems, and advanced computing to an existing national security framework designed to prevent US investment from bolstering foreign adversaries. The Treasury Department unveiled the proposal under the Comprehensive Outbound Investment National Security Act (COINS Act), expanding its Outbound Investment Security Programme.

What the Proposal Covers

The expanded programme would cover transactions involving semiconductors and microelectronics, artificial intelligence, quantum technologies, high-performance computing and supercomputing, hypersonic systems, and biotechnology. Certain investments would be outright prohibited, while others would require mandatory notification to Treasury. The proposed rules have not yet taken effect — public comments are due by 7 December, after which final regulations will establish an implementation date.

Treasury said the measures are intended to block investments that could support military modernisation, intelligence, surveillance, and other capabilities that threaten US national security. Treasury Secretary Scott Bessent said: 'The proposed regulations would strengthen the existing Outbound Investment Security Program to prevent our adversaries from using U.S. investment to develop critical technologies that threaten U.S. national security.'

Country Coverage Expands Beyond China

The existing programme, which originated in an August 2023 executive order and took effect on 2 January 2025, had focused exclusively on specified investments connected to China in semiconductors, quantum technologies, and AI. The new proposal would extend country coverage to include Hong Kong, Macau, Cuba, Iran, North Korea, and Russia.

The statutory language also names Venezuela under the regime of Nicolás Maduro. However, Treasury's accompanying guidance notes that Venezuela does not currently meet that definition because the Maduro regime no longer exists, though investments involving entities there could still fall within the rules through other covered connections.

Implications for Indian-Origin Investors in the US

The proposed obligations would apply to US citizens, lawful permanent residents, and American entities, with additional requirements for controlled foreign entities. Indian-origin investors who fall within those categories would therefore be required to assess covered transactions under the same rules as other US persons — a point Treasury's proposal explicitly addresses. The programme targets particular transactions and technologies rather than imposing a blanket ban on all investment in covered countries.

Proposed exceptions include certain publicly traded securities, investment funds, and transactions within corporate groups, subject to applicable conditions. Christopher Pilkerton, assistant secretary for investment security, said: 'The proposed regulations are designed to address risks that can arise when foreign adversaries try to benefit from U.S. investment in key technology sectors.'

Legislative Background and Programme Scale

The COINS Act was enacted by Congress in December 2025 as part of the fiscal 2026 defence authorisation law, placing the outbound-investment framework on a statutory footing and authorising its expansion to additional technologies and countries. Since the existing programme began operating, Treasury has reportedly received approximately 100 investment notifications in the semiconductor and AI industries alone.

The proposal also sets out information requirements for investors, expectations for reasonable and diligent inquiries, and conduct that could constitute a violation. It would additionally create a process for eligible parties to seek non-binding feedback from Treasury on whether a specific transaction would be prohibited — a mechanism intended to reduce compliance uncertainty as the expanded rules take shape.