The government said foreign-owned, single-brand retailers would get more time to meet its requirements to sell products made by Indians.
The new plant is part of an initiative by Toyota to invest $10 billion in the United States over the next five years.
The scrutiny comes amid broader concerns that foreign buyers are driving up home prices, leading to a growing number of government restrictions.
Mahindra will open the area’s first new vehicle assembly factory in 25 years, building off-road vehicles. The move may signal larger ambitions in the American market.
President Trump wants to cut taxes and reduce the nation’s trade deficit, two goals that stand in direct conflict with each other.
Members of the House and Senate proposed more stringent reviews of Chinese investments Wednesday, even as President Trump traveled to Beijing to announce new deals.