PM Narendra Modi led NDA Government has relaxed the Foreign Direct Investment (FDI) norms in construction sector, mainly to attract foreign investment in real estate sector.
Previously the minimum built-up area requirement for FDI in construction projects was 50,000 sq m. Now it has been relaxed to 20,000 sq m. Also the minimum capital requirement for such projects has also been brought down to $5 million from $10 million.
The measure is also expected to result in creation of much needed low cost affordable housing in the country and development of smart cities.
Modi has been on a spree of liberalization to bring more investment to India. The move will facilitate overseas capital to invest in building homes, offices and shopping centres in Asia’s third-largest economy.
Between April 2000 and August 2014, the construction sector received FDI worth USD 23.75 billion or 10 per cent of the total FDI attracted by India during the period.
In its maiden budget in July, Modi’s administration had proposed easing built up area and minimum capital requirement for foreign investments.
Source Reuters and NDTV