Department of Industrial Policy and Promotion

Centre relaxes FDI Rules in Construction

4:18 PM

Centre relaxes FDI Rules in Construction

The Government has also halved the minimum capital requirement for such projects 
from $10 million to $5 million for joint ventures with Indian partners.

Minimum built-up area reduced to 20,000 sq meters

The Government has formally notified a reduction in the minimum area and minimum capitalisation requirement for foreign investors in construction to attract more funds into the cash-starved sector.
Foreign investors can exit projects on its completion or on development of trunk infrastructure such as water supply, drainage, roads and street lighting, according to a Press Note released by the Department of Industrial Policy and Promotion (DIPP) on Wednesday.
The Press Note is based on the decision taken by the Cabinet for FDI in construction development in October this year.
The minimum built-up area requirement for FDI in construction projects has been reduced to 20,000 square meters from 50,000 sq.m.
For services plots, the minimum area requirement, earlier at 10 hectares, has been dropped completely.
Minimum capital requirement has also been halved to $5 million from $10 million.
For encouraging investments in affordable homes, the Centre has exempted the conditions of minimum floor area as well as capital requirement if an investee/joint venture company commits at least 30 per cent of the total project cost for low-cost housing.


by Amiti Sen for The Hindu Business Line

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