Comments
The Government will soon clarify rules guiding the recently liberalised foreign direct investment (FDI) norms in the construction development sector.
“We will issue clarification in the next two-three days,” said Amitabh Kant, Secretary, Department of Industrial Policy and Promotion (DIPP), at the sidelines of the India Economic Summit organised by World Economic Forum and CII.
Although the Secretary did not elaborate on what exactly will be clarified, real estate developers say that there is some confusion on the minimum area requirement for FDI in the sector.
“We are not very clear about whether the minimum floor area requirement of 20,000 sq m refers to built up area or carpet area,” said Manoj Goyal, Director, Raheja Developers.
Built up area means total outer area while carpet area means usable area for end buyer which includes kitchen but excludes balcony. Carpet area is smaller than built-up area.
“Floor area ratio is different for different cities. Laws too vary in different States. For example, in Mumbai one can sell property based only on carpet area. There needs to be clarity on what the minimum 20,000 sq m condition would apply to,” pointed out Mudassir Zaidi, National Director – Residential, Knight Frank India.
The Government already allows 100 per cent FDI in the construction development sector. The Union Cabinet recently relaxed rules for FDI by reducing minimum floor area to 20,000 sq m from 50,000 sq m (built up area).
The minimum capital requirement for FDI projects was halved to $5 million from $10 million. In case of development of serviced plots, the condition of minimum land of 10 hectares has been removed.
Foreign investors have also been permitted to exit on completion of the project or after three years from the date of final investment, subject to development of trunk infrastructure.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.