Nirmala Sitharaman: Govt working on easing FDI norms in construction sector
Commerce and Industry Minister Nirmala Sitharaman has said in a recent statement that the Government is mulling a proposal pertaining to the easing of the norms related to foreign direct investment (FDI) in the construction sector.
With Sitharaman disclosing that the Government is currently working on a proposal under which FDI norms in construction development sector could be liberalized, some unidentified sources have also revealed that a draft cabinet note on the matter has already been floated by the Commerce and Industry Ministry.
The proposal to ease FDI norms in the construction sector is noteworthy, given the fact that the existing rules underscore stringent conditions when it comes to allowing 100 percent FDI through the automatic route in development of townships, housing and built-up infrastructure.
With the minimum built-up area requirement for FDI in construction projects currently being 50,000 sq metres, the proposal being mulled by the Ministry is to bring down the minimum built-up area requirement to 20,000 sq metres. In addition, it is also being proposed that the minimum capital requirement for FDI in construction projects should also be reduced from $10 million to $5 million.
The proposal to ease FDI norms in the construction sector comes soon after the recent move by the government to liberalise FDI norms for the defence sector, increasing the FDI cap from 26 percent to 49 percent.
Source – Financial Chronicle
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