Sumes Dewan tells the story of Astra Infra to illustrate how innovative structures may overcome the hurdles associated with acquiring land
In March 2005, significant liberalizations to India’s real estate sector were set forth by the Ministry of Commerce and Industry in Press Note 2. Although a number of important restrictions remain in place, the guidelines permit 100% foreign direct investment (FDI) under the automatic route in townships of over 50,000 square metres, serviced housing projects of at least 100,000 square metres, and built-up infrastructure and construction development projects covering a minimum of 500,000 square metres.
The move opened the doors to an influx of FDI in Indian real estate and ushered in new technologies that have enhanced the efficiency of the country’s construction industry. But despite the reforms, real estate investors face significant challenges, perhaps none more acute than the initial acquisition of land.
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Sumes Dewan is a partner at KR Chawla & Co, a full service law firm in New Delhi. He may be contacted at sdewan@krcco.com. The companies and events described in this article are fictitious.
