Foreign Direct Investment in Construction Sector Amended\
The Union Cabinet has given its approval for amending the existing FDI policy on the construction
development sector in line with the budget announcement of the government. Under the extant FDI policy,
100% FDI in construction development sector is permitted under the automatic route subject to certain
conditions which are as follows:
Minimum area to be developed under each project would be:
o In case of development of serviced plots, there is now no condition of minimum land area.
o In case of construction-development projects, a minimum floor area of 20,000 sq. meters.
o In case of a combination project, any one of the aforesaid two conditions will need to be
complied with.
The investee company will be required to bring minimum FDI of US$ 5 million within 6 (six) months
of commencement of the project. The commencement of the project will be the date of approval of
the building plan/lay out plan by the relevant statutory authority. Subsequent tranches of FDI
can be brought till the period of 10 (ten) years from the commencement of the project or before the
completion of the project, whichever expires earlier.
The investor will be permitted to exit on completion of the project or after 3 (three) years from the
date of final investment, subject to development of trunk infrastructure.
The Government may, in view of facts and circumstances of a case, permit repatriation of FDI
or transfer of stake by one non-resident investor to another non-resident investor, before the
completion of the project. These proposals will be considered by FIPB on case to case basis.
The project shall conform to the norms and standards, as laid down in the applicable building control
regulations and other regulations of the state government/municipal/local body concerned.
The Indian investee company will be permitted to sell only developed plots. Developed plots will
mean plots where trunk infrastructure including roads, water supply, street lighting, drainage and
sewerage, have been made available.
The Indian investee company shall be responsible for obtaining all necessary approvals and
complying with all other requirements as prescribed under applicable rules/bye-laws/
regulations of the state government/municipal/local body concerned.
The state government/municipal/local body concerned, which approves the building/development
plans, will monitor compliance of the above conditions by the developer.
The Union Cabinet has given its approval for amending the existing FDI policy on the construction
development sector in line with the budget announcement of the government. Under the extant FDI policy,
100% FDI in construction development sector is permitted under the automatic route subject to certain
conditions which are as follows:
Minimum area to be developed under each project would be:
o In case of development of serviced plots, there is now no condition of minimum land area.
o In case of construction-development projects, a minimum floor area of 20,000 sq. meters.
o In case of a combination project, any one of the aforesaid two conditions will need to be
complied with.
The investee company will be required to bring minimum FDI of US$ 5 million within 6 (six) months
of commencement of the project. The commencement of the project will be the date of approval of
the building plan/lay out plan by the relevant statutory authority. Subsequent tranches of FDI
can be brought till the period of 10 (ten) years from the commencement of the project or before the
completion of the project, whichever expires earlier.
The investor will be permitted to exit on completion of the project or after 3 (three) years from the
date of final investment, subject to development of trunk infrastructure.
The Government may, in view of facts and circumstances of a case, permit repatriation of FDI
or transfer of stake by one non-resident investor to another non-resident investor, before the
completion of the project. These proposals will be considered by FIPB on case to case basis.
The project shall conform to the norms and standards, as laid down in the applicable building control
regulations and other regulations of the state government/municipal/local body concerned.
The Indian investee company will be permitted to sell only developed plots. Developed plots will
mean plots where trunk infrastructure including roads, water supply, street lighting, drainage and
sewerage, have been made available.
The Indian investee company shall be responsible for obtaining all necessary approvals and
complying with all other requirements as prescribed under applicable rules/bye-laws/
regulations of the state government/municipal/local body concerned.
The state government/municipal/local body concerned, which approves the building/development
plans, will monitor compliance of the above conditions by the developer.
