It has reduced minimum built-up area as well as capital requirement and eased the exit norms.
To help attract foreign funds in construction of townships, hospitals and hotels, the government on Wednesday relaxed the FDI policy for this sector by easing exit norms and reducing built-up area and capital needs.
The revised norms relating to construction development sector has been notified by the Department of Industrial Policy and Promotion (DIPP). India allows 100 per cent FDI in the sector through the automatic route.
The new policy has done away with the three-year lock-in period for repatriation of investment.
“The investor will be permitted to exit on completion of the project or after development of trunk infrastructure, that is, roads, water supply, street lighting, drainage and sewerage,” a DIPP circular said.
It is to be noted here, the official statement issued after the October 29 Cabinet meeting had mentioned that the investor can exit on completion of the project or “after three years from the date of final investment,” subject to development of trunk infrastructure.
Under the new policy, the minimum floor area requirement has been reduced to 20,000 square metres from 50,000 square metres earlier. It also brought down the minimum capital requirement to $5 million from $10 million.
In case of development of serviced plots, the condition of minimum land of 10 hectares has been completely removed. Reacting on the new policy, Chairman & Country Head of JLL India Anuj Puri said: “With the FDI policy now providing investors a much more attractive exit option...FII interest in the Indian construction sector is bound to increase.’’
To help attract foreign funds in construction of townships, hospitals and hotels, the government on Wednesday relaxed the FDI policy for this sector by easing exit norms and reducing built-up area and capital needs.
The revised norms relating to construction development sector has been notified by the Department of Industrial Policy and Promotion (DIPP). India allows 100 per cent FDI in the sector through the automatic route.
The new policy has done away with the three-year lock-in period for repatriation of investment.
“The investor will be permitted to exit on completion of the project or after development of trunk infrastructure, that is, roads, water supply, street lighting, drainage and sewerage,” a DIPP circular said.
It is to be noted here, the official statement issued after the October 29 Cabinet meeting had mentioned that the investor can exit on completion of the project or “after three years from the date of final investment,” subject to development of trunk infrastructure.
Under the new policy, the minimum floor area requirement has been reduced to 20,000 square metres from 50,000 square metres earlier. It also brought down the minimum capital requirement to $5 million from $10 million.
In case of development of serviced plots, the condition of minimum land of 10 hectares has been completely removed. Reacting on the new policy, Chairman & Country Head of JLL India Anuj Puri said: “With the FDI policy now providing investors a much more attractive exit option...FII interest in the Indian construction sector is bound to increase.’’
