FDI decision to propel growth in the real estate sector
The Union government recently allowed overseas investors to make 100 per cent FDI (foreign direct investment) in single-brand retail trading and construction development without any government approval.
The decisions would help provide ease of doing business and also lead to larger FDI inflows contributing to growth of investment, income and employment, it said. Real estate broking service does not amount to real estate business and is, therefore, eligible for 100 per cent FDI under the automatic route.
Ashwin Sheth, CMD, Sheth Group: We applaud the Cabinet’s nod to allow 100% FDI in the construction sector via automatic route. The decision will promote ease of doing business in the country and contribute to increase in income and employment. Additionally, it will help strengthen the value of the rupee against global currencies. FDI in construction is expected to provide a significant boost to the real estate sector.
The government’s ambitious projects like ‘Housing For All By 2022’ and ‘Construction of 100 Smart Cities’ will now flourish owing to the substantial participation by foreign investors. This is a step in the right direction and meets most of the industry demands which will propel the growth of the realty sector.
Niranjan Hiranandani, President, NAREDCO: The NDA government has approved key changes in India’s foreign direct investment (FDI) policy, easing investment norms across sectors including construction. The changed policy allows 100 per cent FDI under automatic route for construction development.
The move was part of the government’s broader strategy to liberalise and simplify the FDI policy to facilitate ease of doing business and turn India into a global investment hotspot.
Ramesh Nair, CEO & Country Head, JLL India: The opening up of FDI for real estate brokers is a strong signal of institutionalisation of the services rendered towards real estate in India. With this, establishing and growing large real estate services firm will become more feasible, making it easier to raise capital for such services. The decision adds significance to real estate broking and consultancy business and prophesies the government’s determination to advance the same into an exceedingly organised, structured and transparent market.
Coupled with last year’s reforms as well as India’s emerging status as one of the fastest growing economies in the world, this decision will play a key role in global players exploring further avenues in the Indian real estate market.