Friday, April 11, 2014

Foreign Direct Investment (FDI) Flows in real estate and housing sector in India

Author: Sachin Gupta | Find me on Twitter

Foreign Direct Investment (FDI) is a good indicator of a country’s attractiveness to global investors. India has been able to attract substantial amount of FDI into various sectors such as services, construction development, telecommunications, computer hardware & software, drugs & pharmaceuticals, chemicals, automobile, power, metallurgy, hotel & tourism. Significance of Foreign Direct Investment can hardly be underestimated and therefore government of India has devised policies which have attracted FDI into various sectors mentioned above. Here is a quick look at the flow of FDI into India since April 2000.




It can be noted from above chart that FDI flows into India jumped from financial year 2006-2007 on account of policy initiative by the government which permits FDI under the following forms:

  1. Financial collaborations.
  2. Joint ventures and technical collaborations.
  3. Capital markets via Euro issues.
  4. Private placements or preferential allotments.



Foreign Direct Investment (FDI) in CONSTRUCTION DEVELOPMENT: TOWNSHIPS, HOUSING, BUILT-UP INFRASTRUCTURE

The FDI Equity flow in housing and real estate sector was 8.9% in financial year 2008-2009, 11% in financial year 2009-2010, 5.3% in financial year 2010-2011, 8.9% in financial year 2011-2012, 5.9% in financial year 2012-2013 of total FDI equity flows into India. Overall, the sector has attracted a total of 23046.61 US $ Million from April 2000 to January 2014. The total FDI equity flows into India during this same period has been 212153 US $ Million. In other words, from April 2000 to January 2014, the construction development sector including of townships, housing, built-up infrastructure has attracted about 11% of total FDI equity inflows.



In 2005, India relaxed the norms for FDI inflows into real estate and housing sector by allowing Foreign Direct Investment under the automatic route which means no prior permission is required for approval either from Government of India or the from the RBI. The policy permits FDI up to 100 per cent under the automatic route in townships, housing and construction development projects and hospitality sectors such as residential complexes, shopping centers, malls, multiplexes, Cineplex, commercial offices, hotels/service apartments, resorts, hospitals, educational institutions.

Here are the detailed guidelines for FDI in Real Estate:




Guidelines for fdi in real estate in india from Green Realtech Projects Pvt. Ltd

Can the sector see increased FDI in near future?


Have any Questions?

16 comments:

  1. entry of FDI in real estate is a very good decision. this will bring a lot of investment and this is a very good sign. but FDI in retail is not this much appreciable.

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