Construction development: Township, Built-up infrastructure

100% FDI is allowed under the automatic route in the following:

Construction-development projects (including but not restricted to) –   Housing,

–  Commercial premises

–  Resorts

–  Educational institutions

–  Recreational facilities

–  City and regional level infrastructure, and

–  Townships

Who can invest in India?

  • A non-resident entity
  • A citizen of Pakistan & Bangladesh or an entity incorporated there can invest only under the government route

Who can get investment?

  • An Indian Company
  • Partnership / Proprietorship Firm by NRI/PIO

▫ Repatriation Basis – Approval Route

Non – Repatriation Basis – Automatic

  • Partnership/Proprietorship Firm by NR (Foreigner)

▫Repatriation – Approval Route

▫Non Repatriation Basis – Approval Route

Investment will be subject to following conditions:

  1. Minimum area to be developed

–  In case of development of serviced housing plots, a minimum land   area of   10 hectares

–  In case of construction-development projects, a minimum built-up   area of   50,000 sq.mts

–   In case of combination projects, any one of the above two conditions          would suffice

  1. Minimum capitalisation

–   US$ 10 million for a wholly-owned subsidiary

–  US$ 5 million for a JV with an Indian partner

  1. 3. Lock In period

Original investment i.e. the entire amount brought in as FDI with a minimum three-year lock-in from the date of receipt of each FDI installment or from the date of completion of minimum capitalisation, whichever is later.

Investment will be subject to following conditions:

  1. At least 50% of each projects must be developed within a period of five years from the date of obtaining all statutory clearances.
  2. Investor / Investee will be responsible for the necessary approvals from all the Statutory / Government Bodies.

Exemptions to Conditions…

  • Investment by NRIs is not subject to the conditions (1 to 4) as are applicable in the case of construction development projects.
  • Investment in SEZs, hotels, hospitals, industrial parks (satisfying prescribed conditions), the education sector and old-age homes is also exempt from the conditions (1 to4).

Instruments for receiving FDI

Foreign investment is reckoned as FDI only if the investment is made in:

  • Equity shares
  • Fully and mandatorily convertible preference shares
  • Fully and mandatorily convertible debentures