With an objective to attract foreign investment and provide houses at affordable prices to the people, the DIPP is favourably looking at relaxing FDI norms for the housing sector, including easing the three-year lock-in period.
As per the current FDI policy, the lock-in period of three years applies to every tranche of investment brought in by a foreign player from the date of receipt or from the date of 'completion' of minimum capitalization whichever is later. As per sources, DIPP has basically acknowledged the need of defining the word ‘completion’ in the current policy on the matter of reducing three year lock-in period.
The proposal to relax FDI guidelines for the sector is been mooted by the Ministry of Housing and Urban Poverty Alleviation. They have suggested cutting the minimum built-up area of 50,000 sq mts in case of construction development projects to 20,000 sq mts of carpet area, besides revising the minimum capitalization to $5 million from the present $10 million for wholly-owned subsidiaries.
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