Relaxing capital requirement to attract FDI in construction sector projects

To attract more foreign investment in construction and real estate sector Indian Govt plans to relaxing foreign direct investment (FDI) norms in construction sector. Proposed to bring down the minimum built-up area requirement for FDI in construction projects from 50,000 sq. metres to 20,000 sq. metres and reducing the minimum capital requirement for such projects from $10 million to $5 million.

100% foreign direct investment is allowed in townships, housing and built-up infrastructure and construction developments with some conditions. Earlier Finance Minister had also said that projects which commit at least 30% of the total project cost for low cost affordable housing would be exempted from minimum built up area and capitalisation requirements, with the condition of 3 year lock-in.

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