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ARTICLE · 03 APRIL 2017

FDI In Real Estate Sector

Krishnomics Legal
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Real Estate Sector in India has been going through a rough weather for the last few years due to lack of funds and sluggish demand.

IndiaReal Estate and Construction
Gagan Kumar
Gagan Kumar
Amit Kaushik
Amit Kaushik

Real Estate Sector in India has been going through a rough weather for the last few years due to lack of funds and sluggish demand.

Real Estate Business1 is one of the nine activities where Foreign Direct Investment ("FDI") is prohibited. However, considering that "Housing for all" is one of the key objectives of the Government, an exception has been carved out permitting FDI in Construction-Development projects2.

Until October 2015, 100% FDI was permitted in Construction-Development projects with following conditions:-

  1. Minimum floor area to be developed of 20,000 sq. metres.
  2. Mandatory infusion of FDI of minimum USD 5 million within 6 months of the commencement of the project.

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