Centre mulls relaxation in FDI policy for real estate
Though FDI is permitted in warehouses, there are restrictions on bringing foreign money on running projects
The Union Ministry of Commerce and Industry is considering relaxation in the foreign direct investment (FDI) policy for the real estate sector, including 100% FDI in completed RERA registered projects with over 100 apartments.
This will allow FDI for completed apartments with occupancy certificates. The consideration by the government for further relaxation comes in the midst of the Coronavirus crisis, lack of business and the resultant liquidity crisis. This will allow real estate players to monetise their completed projects so that focus could be diverted to complete pending housing projects that are stuck largely due to shortage of funds.
Though FDI is permitted in warehouses, there are restrictions on bringing foreign money on running projects. In fact, an overhaul of the FDI policy is on the cards and the Department for Promotion of Industry and Internal Trade (DPIIT) is expected to come with various changes soon.
While the government is looking to liberalise the FDI regime in the real estate sector further, it is still not included to open overseas investment in real estate business. The restrictions on FDI in real estate entities are also expected to continue for some more time.