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. In this document, we present the guidelines for Foreign Direct Investment (FDI) in real estate, property and housing sector in India

1. Guidelines for FDI in Real Estate in India
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Guidelines for FDI in Real Estate in India
Foreign Direct Investment (FDI) is now recognized as an important driver of growth in the country. The
Central India is, therefore, making all efforts to attract and facilitate FDI investment from Non Residents
including Overseas Corporate Bodies that are owned by them.
Thus, FDI is permitted under the following forms; namely through:
1. Financial collaborations.
2. Joint ventures and technical collaborations.
3. Capital markets via Euro issues.
4. Private placements or preferential allotments.
Investment in Development of Integrated Townships and Related Infrastructure
With a view to catalyze investments in development of townships and infrastructure, 100 per cent FDI is
allowed under the automatic route in townships, housing and construction development projects and
hospitality sectors such as residential complexes, shopping centers, malls, multiplexes, Cineplex’s,
commercial offices, hotels/service apartments, resorts, hospitals, educational institutions.
NRIs and OCBs are allowed to invest in the following activities:
1. Development of serviced plots and construction of built up residential premises,
2. Real estate development covering construction of residential and commercial premises,
including business centers and offices,
3. Development of townships,
4. Development of city and region level urban infrastructure facilities including roads and bridges,
5. Manufacturing of building materials and their application,
6. Investment in participatory ventures in (a) to (e) above,
7. Investment in Housing Finance Institutions, which is also open to FDI as an NBFC.
Foreign investors are still barred from acquiring and trading in undeveloped land. The policy has already
attracted several large financial entities and private equity funds to participate in large real estate
projects.

2. Guidelines for FDI in Real Estate in India
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Significant features
1. Minimum area requirements, in case of
 Development of serviced housing plots - 10 hectares.
 Construction-development projects - built-up area of 50,000 sq. mts.
 A combination project, any of the above two conditions will suffice.
2. Investment
 Minimum capitalization for wholly owned subsidiaries - US$ 10 million; for joint ventures
with Indian partners - US$ 5 million, to be brought in within 6 months of commencement of
business.
 Original investment cannot be repatriated before a period of three years from completion of
capitalization.
 The investor may exit earlier with prior approval from Foreign Investment Promotion Board
(FIPB).
3. Time frame & rules
 At least 50 per cent of the project to be developed within five years from the date of
obtaining all statutory clearances.
 Investor shall be responsible for obtaining all necessary approvals such as building/layout
plans and developing internal and peripheral areas and other infrastructure facilities
 Investor cannot sell undeveloped plots - where roads, water supply, street lighting,
drainage, sewerage and other conveniences are not available.

3. Guidelines for FDI in Real Estate in India
Aggregated and Prepared by: www.nirrtigo.com
Green Realtech Projects Pvt. Ltd
Real Estate Projects India | User Ratings & Reviews | Common Cause | Discussions | Research Page
Procedure for automatic approval
No approval is required under the automatic route and the only requirement is to submit a report to the
Reserve Bank of India for furnishing the details of the amount of consideration brought in for issue of
shares/convertible debentures along with Foreign Inward Remittance Certificate. FDI can take place
after taking necessary regulatory approvals from the State Governments and local Authorities for
construction of building, water supply and environmental clearance, etc.
Source: National Housing Bank
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