FDI rules in the construction field to be relaxed
The Government is now trying to fast-track a decision on easing rules for foreign investments in the construction development sector. This decision was taken after liberalising foreign direct investment (FDI) norms in the defence sector and the Railways. This has received a good response from many countries and countries like Singapore, Japan and Russia have already approached the Indian Government with proposals of Investments. Many nations want to provide the technology support as they are successfully running smart cities in their countries and India does not have the technology edge in this regard.
The Department of Industrial Policy & Promotion (DIPP) has floated a Cabinet note proposing a few changes. Their proposal is to bring down the minimum built-up area requirement for FDI in construction projects from 50,000 square metres to 20,000 square metres.
It has also proposed reducing the minimum capital requirement for such projects from $10 million to $5 million.The existing policy allows 100 % FDI in the construction sector which is subject to minimum built-up area and minimum capitalisation requirements. This draft Cabinet note also suggested a few things for these projects which will bring cheer to the real estate sector. The proposal suggested that the projects which commit at least 30 % of the total project cost for low cost affordable housing would be exempted from minimum built-up area and capitalisation requirements.
Source- The Hindu Business Line
Construction, Department of Industrial Policy & Promotion, DIPP, FDI in construction projects, FDI India, FDI rules, foreign direct investment, low cost affordable housing, Real Estate Sector
