The Cabinet has relaxed norms for foreign direct investment (FDI) in construction development to make the sector more attractive for overseas investors. The minimum built-up area requirement for FDI in construction projects has been reduced from 50,000 sq m to 20,000 sq m, according to an official release.
The government has also halved the minimum capital requirement for such projects from $10 million to $5 million. Projects that commit at least 30 per cent of the total project cost toward low-cost affordable housing will be exempted from the minimum built-up area and capitalisation requirements. However, there has been no relaxation in land-use norms.
According to the new rules, an investor will be permitted to exit on completion of the project or three years after the date of final investment, subject to development of trunk infrastructure.
The government may permit repatriation of foreign investment or transfer of stake by one non-resident investor to another non-resident investor before the completion of the project.