Indian real estate sector is currently witnessing keen interest from foreign investors to invest in Indian properties. Looking in to the current scenario government may relax norms for Foreign Direct Investment (FDI) in the sector. The proposal for relaxing the norms for FDI is put forward in Cabinet for approval, if the conditions are approved, the minimum capital limit will reduce to $ 5 million from the current limit 0f $ 10 million.
Department of Industrial Policy and Promotion (DIPP) have proposed the relaxing of conditions in order to attract more investment in the sector. According to the officials, the proposal is initiated to increase affordable housing in the country, the minimizing of capital funds is for wholly-owned subsidiaries, the companies will have to bring funds at the initial stage of the business within six months. A circular will be released form cabinet for suggestions and improvement in the proposal.
Currently according to the extant FDI policy, 100 per cent FDI in the construction development sector is allowed through automatic route. India is witnessing a good amount funds through FDI, during a decade the country has allocated funds of 422.43 billion totally, the FDI contributes in developments of infrastructure, housing and townships. Though, DIPP assumes relaxing the norms will bring more investment.